US Retail: Broad evidence of consumer strain moving from low income into the middle class, with value-seeking behavior and pressured discretionary demand ahead of the holidays.
Home Improvement Retail (HD, LOW): Housing-related uncertainty is weighing on demand; commentary contrasts contractor-heavy Home Depot with more consumer-focused Lowe’s, highlighting diverging end-markets.
Broadline & Club Retail (TGT, WMT, BJ): Target notes consumers prioritizing essentials and value with weaker confidence; Walmart and BJ’s echo shifts to necessities and cautious spending across income tiers.
Specialty Stores: Bath & Body Works, Williams-Sonoma, and Tractor Supply signals show cautious consumers, with macro affordability and confidence headwinds dampening discretionary categories.
Automotive & Parts (GPC plus peers): Auto-related retailers cite cautious demand and value focus; tariff and cost dynamics pressure margins as passing on higher costs to strapped consumers remains difficult.
US Treasuries: Soft PPI and weakening growth signals boost odds of a Fed rate cut; the guest highlights being long the 2-year and reading price action that points to lower yields.
Market Outlook: Falling yields on the 2-year and 10-year reflect declining growth and inflation expectations, raising risks to holiday sales while offering potential opportunity in Treasuries.
Transcript
Hello, fellow Rebel Capitalists. Hope you're well. So, we have a lot of big-time CEOs coming out and giving dire warnings about the economy and the consumer. And of course, I think this is going to go right back into the labor market, that doom loop we always talk about. But let's go right over to this article from Zero Hedge. I'll show you guys exactly what's going on and then we'll connect some dots. And I also have a big bonus for you. At the end of this video, I want to go over the inflation data we just got today. This was delayed, but I think this is really going to impact the Fed's decision as to whether or not they're going to pause or drop interest rates. So, let's start by doing a screen share and going over to Zero Hedge. And uh here we go. So, consumer strain moves beyond low income into the heart of the middle class. So, this is according to Goldman Sachs managing director Kate McShane. She provided clients with a summary of the key takeaways from her meetings with investor relations and management teams of Bath, Bodyworks, BJ's Wholesale Club. I have no idea what that is. I'm I'm guessing maybe like Sam's Club, the Home Depot, Walls, Target, Mark, uh Target, Walmart, and William. Actually, a lot more than that. So this is, I think, a great picture to describe what's happening here to, let's just say, 90% of Americans. You've got the 10% with assets and they're Scrooge McDuck just swimming around in their piles of gold, [laughter] you know, popping bottles at the club, baby. Well, the Bitcoiners were doing that. Not so much lately. But I think this is an accurate visual right here. And um getting back to it, let's see the next thing I've highlighted. Low to middle inome consumers remain fragile. I think they're getting more fragile, valued driven and cautious ahead of holiday spending. That's a big deal because the holiday season is when the market expects for all of these big corporations, especially the retailers, to have just booming profits, you know, windfalls that really kind of for a lot of them make the entire year. And it seems like this holiday season might be, let's just say, disappointing. Now, we go down and this is really cool. So, they show kind of I think it was the gal from Goldman Sachs, her notes regarding the CEO conference calls. Let me read the this quarter. Many companies emphasize consumer continues to remain cautious or discretionary demand under pressure. So, I'm guessing these are the corporations that uh this Goldman Sachs gal follows. So, she gave a brief summary here. So, check this out. And I actually had to look up some of these tickers. I believe it or not, I did some homework for this video. Sure you guys are extremely impressed. So, AAP, I've got it written down here in my notes. advanced auto parts. They expect temporary volatility as consumers manage household budgets amongst the inflationary backdrop. They are seeing the lower to middle class consumer decrease they're spending across general merchandise. So, let's be clear. It is true that prices are still going up. No one disputes that. But that in and of itself isn't that's a problem for sure, but that's not the main problem here. The main problem is that prices are doing this, but wages are doing that. You know, I always use this symbol because I think it's just a great visual. And the bigger this gap is, the more the consumer is getting squeezed, the lower their purchasing power, the harder it is for them to put food on the table. And even if they can put a roof over their head, food on the table, if that's not the problem, it's they have less discretionary income. Let's keep going. BBWI. And by the way, I think that a lot of these companies target very specific demographics that reveal a lot about what's happening in the economy. And pretty much it's exactly what we've been talking about on this channel for the last year or two. So BBWI was Bath Body Works. Bath and Body Works. Macro consumer sentiment is weighing heavily on consumers purchase intents. Consumer confidence is continued to decline due to job loss and affordability. So this is the doom loop. What happens is the labor market starts to deteriorate because of this. And then this shows up in corporate profits. and what the corporations are seeing and as a result they and they're getting squeezed too because their costs are going up in some cases. So they can't pass that cost on to the consumer because the consumer is already strapped because their incomes aren't going up at the same rate as prices and they haven't been since well they haven't been since 2019. It's just they had a buffer in there in the form of STEMI checks and PP uh PP U P and whatever it is that they were getting. I mean you guys know that you know what happened back then. But now it's time to pay the fiddler like like rubbers meeting the road here. And we knew this was going to happen. It was just a m it's inevitable. The only people that thought this wouldn't happen are basically Keynesians that think that any type of spending is fantastic. So, if the government spends into the economy, well, that's just going to put a band-aid over the problem. But it's not even a band-aid. The Keynesians think that if the government spends, then that fills the void, right, of aggregate demand. And that is kind of like a bridge that gets us to the other side where animal spirits kick in and the economy starts to accelerate again. So, they see all spending as good spending as opposed to someone like me. I say nah, not really. Government spending that's actually a net negative because of the distortions in the economy because that spending isn't due to a profit and loss motive. It's not due to a proper allocation of resources due to the price signal, right? Or due to basically consumer demand. And so what ends up happening is the Keynesian thinks that it's going to build this bridge to the other side to where the economy is going to reacelerate. But what it does is it just builds a bridge to the other side where things are a lot worse than they were to begin with. Let's keep going. So the next one is BJ. Now this is the the BJ's. I don't know what BJ's Let me go to the chat. Do you guys know what the heck BJ's? What is BJ's? Josh, have you ever heard of BJ's? Oh, Josh is gone. I'm Oh, it's like Oh, it's Costco, a warehousing business to business and business to consumer firm. Oh, okay. Cool, Jose. I appreciate that. I I I've never even heard of BJ's. Okay, let's go back to All right, the next one. Or actually, let me read what they're saying. Consumer conf and this is important if it's like a Costco for sure because they've really got their finger on the pulse of the consumer. Consumer confidence is at lows with consumer AC consumers across all income levels remaining cautious. H specifically inflation is putting clear pressure on the lowincome consumer. It's not exactly inflation. It's the fact that wages haven't gone up with inflation. Discretionary demand also remains pressured with many consumers exhibiting value seeking behavior. This is actually a theme that you're going to hear throughout. The next one is I. That is national vision. I don't know what national vision is. I assume it's like where you [snorts] get glasses kind of like a a lens crafters. You guys can correct me in the chat if I'm wrong. Their cash paying consumers remain a little depressed. Okay. With a delayed purchase cycle. However, some cash paying consumers are adopting higher price points. H. All right. So, I don't know. I don't really know what the takeaway is there. Are they they're comparing their cash consumers to people that are buying on layaway or with a payment plan? I'm not exactly what they're saying here. And then however, some cash paying consumers are adopting higher price points. Okay. Well, that gives us a little bit different angle here in terms of people buying glasses. Maybe they're trading. You know what though? I wonder if they sell AI glasses because as an example, when I was at at the New Orleans investment conference, I was with Josh and we went over to the mall because uh long story short is I can't get any shoes in Colombia because the largest size they have here is like a nine and I wear a 12. [laughter] So, if you've ever been to the New Orleans Investment Conference, it's actually attached to a mall. So, I'm like, great. This is a good opportunity for me to go get some shoes for next year. And so, I was over there buying some shoes and we just went by a sunglasses hut. And Josh was telling me that they came out with the meta glasses. In fact, I've got them right there. And I'm like, "Oh, yeah. Let me get the meta glasses so I can take pictures and you can actually live stream." I thought it'd be great for the next uh road trip to freedom challenge we do. But anyway, I mean, they're almost sold out and so I know this is a really really really hot item. So, and and they're about $485 if my memory serves me well. So, I'm curious as to whether this, however, some cash paying consumers are adopting higher price points are doing so because they're buying what do they call them? Smart glasses or something like that. There has been s and now this is FND which is floor and decor. Another one I've never heard of. There has been sustained softness in consumer demand, limited category growth in the flooring market. Consumer spending is likely to remain restrained on big ticket discretionary goods. Okay, that's interesting because if you're replacing your floor, I'm assuming they're selling like hardwood floors and what I mean that's a big big expenditure. So, the fact that people are really pulling back there, not surprising, but it is very good intel that we need to plug into our analysis. And again, just as a reminder here, guys, as soon as we get through this list, I'll I'll try to hurry it up. We're going to go over and check out today's uh inflation data and then see how that's changed the probabilities that the Fed cuts. Okay, where were we? GPC genuine I think there's auto parts store consumer remain cautious looking for best value external environment remains dynamic [laughter] that's a nice way of saying that the economy sucks marked by a [laughter] a fluid tariff landscape. Oh, maybe this is them having to pay the higher prices because we know through the data definitively that foreigners aren't paying the tariffs uh because import prices aren't going up and this import prices exclude tariffs. So, who who is who is really bearing the the brunt of the tariff cost? That would be the importers, the US importers. It's squeezing their margin. So, maybe this is referring to that heightened cost of inflation. And so they're trying to pass it on to the consumer and the consumers are are saying, "Ah, no, we don't have the money for it." And that's why their environment remains dynamic. [laughter] The stagnant market condition. Okay, moving on. Home Depot and Lowe's. Consumer uncertainty continued. Pressure on housing continued disport disproportionately impacting home improvement demand. Okay. Uh, now Lowe's says US homeowner remains healthy. Balance sheets are strong. They say that that's really interesting, huh? Because I, as you know, when I retired in 2012, I went out and bought a bunch of rental properties and I I kind of managed the rehab process myself and most, you know what the difference is? Because I would go to Lowe's and Home Depot. It seemed like Home Depot had more of the contractors that would go there and Lowe's had more of like the soccer moms that would go there. That was just my that was my take on it. So maybe that's why we're seeing a discrepancy. LTH Oh, so this is Lifetime Health and Fitness. And of course, what do you think they're going to say? If you guys don't know what Lifetime is, it's a really high-end gym. They're not seeing anything different or new trends in the consumer base. Yeah, because everyone that goes there is rich. [laughter] So, that's Yeah, the rich people are doing great. It's everyone else, not so much. Uh, consumers are responding well to their value incentives. Okay, that's MODG, which is uh Oh, that was Topgolf or which is O'Reilly. pretty much saying the same thing as the other auto parts they or auto parts stores they expect to continue seeing consumer remain conservative. They also believe the dynamic consumer under uncertainty is felt industrywide. Yep, I think they're spot on there. Target consumers are choiceful, stretched budgets, prioritizing value. They are spending mostly on essentials, food, beauty, while looking for trend right deals in discretionary. There are declines in consumer confidence. Consumers remain cautious for the holidays but are still interested in celebrating seasonal. Of course they are. Why? Why would you even say that? But are still interested in celebrating the holiday? Well, yeah, they're not going to cancel Christmas. [laughter] Sorry. Sorry, little Jimmy and Susie. We're we're we're cancelling uh Thanksgiving. [laughter] Oh jeez. Okay. Consumer remains discerning in their spending. Okay. That was according to Tractor Supply. Then Walmart consumers are moving to companies that provide the most value. They are also moving their spending to necessities. There's some moderation spending for lower income. Okay. Yeah. So, pretty much the same thing that Target is saying. And then WSM, which is Williams and Synoma, I think they're assuming no changes. Yeah, because rich people go there. So, that would all make sense. All right. Now, let's go over to the PPI data. And um let's start with the calendar that I always like to go to. So, quick snapshot, guys. We got the PPI and this was a.3. But what's really interesting here is the core PPI which only came in at a 0.1. The expectations were for a.3 uh PPI year-over-year dropped down to 2.7 core at 2.9 which is consistent with the last reading. Now this also is not the most recent report due to the shutdown. This is for September. So kind of u take that into consideration. So now let's click on this and US retail sales.2 okay minus autos.3 which is at expectations. So autos are a drag. Again, this is not uh surprising, especially if you've been following my videos and you saw what happened to CarMax and they just got shellacked. Just absolutely smoked. And full disclosure, I was fortunately I was short CarMax and uh that that was a that was a big big winner for me. So that that was I was happy to see that in terms of my portfolio, not for the overall economy. Let's go to the details. PPI, wholesale inflation was fairly tame. Now, PPI is producer price index for those of you who are kind of noobs here uh before government shutdown. But PPI might not sway Fed rate cut vote. Well, let's find out. Let's go over to the CME group. We're going to look at Fed Watch. And well, that's not good. What did did China hack into CME? Whoa. What's going on here? [laughter] Let's refresh. Okay, 14 days. Whoa. Okay, that's a big different. Look at this. Wow. So, this was all It's not showing what it was like a week and a half ago, but a week and a half ago when we got the the government shutdown when it ended and everyone's like, "Yay, the economy is going to boom. Woohoo. Woo, the Fed doesn't have to cut interest rates. And then Jerome Pal came out and was talking very hawkish and the odds I remember well because I did videos on it. The odds of a rate cut went down to like uh I think it was like 35% something. So say 35% rate cut only 65% or uh 65% for a pause. Okay. And then a week ago we go 50/50. But now look at what's happened due to everything we're talking about in this video. Now the probability of a rate cut is 85%. 84.9 and of course a pause now at 15.1. So, how times have changed in just just a week, just a week or a week and a half or so, you have this massive swing from the odds of a pause going from 30 35% all the way up to 85%. And look, one of the things I've had a great year as far as as my portfolio and uh I we talk about this all the time. Well, we don't talk about how great my portfolio is, but we talk about >> [laughter] >> kind of the the the strategies, the contrarian strategies that have worked extremely well. We talk about them in Rebel Capitals Pro all the time, but I I do the the trade alerts there. And one of the things that's really really worked well for me this year is just asking myself, what is the market telling me? And I know it sounds kind of weird, but it like let me give you an example here. Let's go over to the 2-year. And for full disclosure, again, I have been long the two-year Treasury through the futures market. I I've I've long I'm I'm long um two-year futures, which is the ticker uh ZT ZT. Z is in zebra, T is in Thomas. And I actually had to close the position today because I've got to roll it over because of expiration. and blah blah blah blah blah. But let's go over to year-to date and you can see what the two-year Treasury yield has done. It's just it's just gone straight down. I mean, trend is your friend. There's a good trend. And what happens is every single time we kind of get a a knee-jerk up due to Jerome Powell coming out and being hawkish, the market bumps up, but then kind of right back down. And then we get this bump up and right back down. And then remember in April when everyone was saying that interest rates are going to 20% and no one's buying treasuries, foreigners are dumping the debt, the deficits, blah blah blah blah blah. We see interest rates go up and then start to roll over, come back down. So what this chart is telling me, and maybe I'm misinterpreting it, but it's telling me interest rates want to go down. So, it's like the two-year just kind of reaching out of the screen and grabbing me and taking my shirt and saying, "George, I want to go down. I want I want to go down and I'm going to go down." And well, I shouldn't say that. It's not that I'm going down. I want to go down. I want to go down. So, whenever I I and I try to pick up on that. So whenever I've seen, you know, a big bump up de due to like the government shutdown, I think that was the last time I added to the position because the the okay, no more government shutdown, growth in inflation expectations increase, the 2-year Treasury goes up to 363, I think it was. And so I'm like, I'm going to fade that all day long because this is going against what the 2-year is telling me it wants to do. And sure enough, you know, the data comes out that that's the market's weak or the labor market is weak, PPI is weak, and then you just see it roll right over like it has pretty much every single time. And that's uh because especially because the leverage in futures um I made a lot of money on that, a lot of money. And it's just kind of paying attention to maybe a a more professional way to say it is paying attention to this or paying attention to the signal that you're getting from the price action. But I just wanted to kind of uh share that with you guys. But, uh, you know, it's no surprise here that interest rates are down almost four basis points on the 2-year due to what we're seeing in the PPI. And then obviously, this is also expressed through the odds changing quite significantly of a Fed rate cut in December. And that's not trading advice, that's not investing advice, any of that stuff. I'm just kind of sharing with you guys um what I've been doing and we get into the details in in Rebel Capitals Pro. If you want to uh check out check that out, there'll be a link in the description here. But let's go back to curious the 10-year today. Wow. Okay, the 10 years down. Look at that. Is and this is a great example of narrative verse reality. You guys know on this channel I pound the table constantly, constantly, constantly on the idea that growth and inflation expectations are much more powerful in terms of their impact on interest rates, especially at the long end of the curve, than debt and deficit expectations. So, look at what's happened to the 10-year Treasury this year. I mean, we get up to 4 point I don't know what that is. 75 and now we're down 75 basis points. [laughter] Now, let me ask you a question. Has the debt gone down? Wrong. What's the debt now? 38 trillion. But what's what's happened here? Well, growth and inflation expectations have gone down and you get some noise in here like we saw after retardation day, but then the market just goes right right back to kind of where it was. And there's a mechanical reason for this. It's not just, well, I don't know, the foreigners are stupid and they're just continuing to buy the treasuries. It'll blow up on them one day. No, that's not the reason. [laughter] There there's a mechanical reason for this. And once you understand that mechanical reason, it gives you a huge huge edge. It's just you got to have an open mind and you can't be dogmatic about it like um a lot of people are in terms of the dollar and in terms of interest rates. If if you you know, you've got to decide do do you want to be part of a religion or do you want to be part of a cult? Do you want to be part of a movement? or do you want to make money? And if you're if you want to be part of a movement, that's great. That's fine. But you you've got to realize that that's your priority because if you want to make money, you got to be agnostic about this stuff. You got to be completely and totally agnostic. And you know, based on the narrative that we were hearing back when, you know, the foreigners are dumping treasuries, no one's going to buy the the 10-year anymore, all the central banks are dumping and blah blah blah. Now, that was true, but that doesn't mean that it impacts interest rates because your marginal buyer is going to be the banks and they've got an infinite balance sheet. So anyway, it's just I think it's interesting that during this time when and even when it was going down even now I still occasionally listen to a podcast where the person will be saying well you know I mean interest rates are are really going up the Fed's losing control of interest rates even though the 10 years trading lower than Fed funds. [laughter] It's like have you looked at a chart in the last I don't know year? Uh probably not. So, let's see what we've got next week, ladies and gents. I thought we had initial claims this week. Oh, maybe not. Oh, got ADP next week. We're going to have to really pay attention to that. And here we go. Initial initial claims next Thursday. Okay, I misread that. Oh, and PCE, that's going to be huge, too. That's going to be really, really huge. All right, guys, on that bombshell, enjoy the rest of your afternoon. As always, make sure you are standing up for freedom, liberty, free market capitalism. If you want to check out all the insider intel and the contrarian strategies that we're using right now to get uh some great returns, this year's been awesome. I think this month alone I'm up maybe 9% or so which is really impressive considering I'm like 60% in T bills. [laughter] So anyway, if you want to check out the insider intel in Rebel Capitals Pro, uh just go ahead and click the link in the description below and I will see you on the next video.
CEOs Just Gave A Dire Warning About The Economy
Summary
Transcript
Hello, fellow Rebel Capitalists. Hope you're well. So, we have a lot of big-time CEOs coming out and giving dire warnings about the economy and the consumer. And of course, I think this is going to go right back into the labor market, that doom loop we always talk about. But let's go right over to this article from Zero Hedge. I'll show you guys exactly what's going on and then we'll connect some dots. And I also have a big bonus for you. At the end of this video, I want to go over the inflation data we just got today. This was delayed, but I think this is really going to impact the Fed's decision as to whether or not they're going to pause or drop interest rates. So, let's start by doing a screen share and going over to Zero Hedge. And uh here we go. So, consumer strain moves beyond low income into the heart of the middle class. So, this is according to Goldman Sachs managing director Kate McShane. She provided clients with a summary of the key takeaways from her meetings with investor relations and management teams of Bath, Bodyworks, BJ's Wholesale Club. I have no idea what that is. I'm I'm guessing maybe like Sam's Club, the Home Depot, Walls, Target, Mark, uh Target, Walmart, and William. Actually, a lot more than that. So this is, I think, a great picture to describe what's happening here to, let's just say, 90% of Americans. You've got the 10% with assets and they're Scrooge McDuck just swimming around in their piles of gold, [laughter] you know, popping bottles at the club, baby. Well, the Bitcoiners were doing that. Not so much lately. But I think this is an accurate visual right here. And um getting back to it, let's see the next thing I've highlighted. Low to middle inome consumers remain fragile. I think they're getting more fragile, valued driven and cautious ahead of holiday spending. That's a big deal because the holiday season is when the market expects for all of these big corporations, especially the retailers, to have just booming profits, you know, windfalls that really kind of for a lot of them make the entire year. And it seems like this holiday season might be, let's just say, disappointing. Now, we go down and this is really cool. So, they show kind of I think it was the gal from Goldman Sachs, her notes regarding the CEO conference calls. Let me read the this quarter. Many companies emphasize consumer continues to remain cautious or discretionary demand under pressure. So, I'm guessing these are the corporations that uh this Goldman Sachs gal follows. So, she gave a brief summary here. So, check this out. And I actually had to look up some of these tickers. I believe it or not, I did some homework for this video. Sure you guys are extremely impressed. So, AAP, I've got it written down here in my notes. advanced auto parts. They expect temporary volatility as consumers manage household budgets amongst the inflationary backdrop. They are seeing the lower to middle class consumer decrease they're spending across general merchandise. So, let's be clear. It is true that prices are still going up. No one disputes that. But that in and of itself isn't that's a problem for sure, but that's not the main problem here. The main problem is that prices are doing this, but wages are doing that. You know, I always use this symbol because I think it's just a great visual. And the bigger this gap is, the more the consumer is getting squeezed, the lower their purchasing power, the harder it is for them to put food on the table. And even if they can put a roof over their head, food on the table, if that's not the problem, it's they have less discretionary income. Let's keep going. BBWI. And by the way, I think that a lot of these companies target very specific demographics that reveal a lot about what's happening in the economy. And pretty much it's exactly what we've been talking about on this channel for the last year or two. So BBWI was Bath Body Works. Bath and Body Works. Macro consumer sentiment is weighing heavily on consumers purchase intents. Consumer confidence is continued to decline due to job loss and affordability. So this is the doom loop. What happens is the labor market starts to deteriorate because of this. And then this shows up in corporate profits. and what the corporations are seeing and as a result they and they're getting squeezed too because their costs are going up in some cases. So they can't pass that cost on to the consumer because the consumer is already strapped because their incomes aren't going up at the same rate as prices and they haven't been since well they haven't been since 2019. It's just they had a buffer in there in the form of STEMI checks and PP uh PP U P and whatever it is that they were getting. I mean you guys know that you know what happened back then. But now it's time to pay the fiddler like like rubbers meeting the road here. And we knew this was going to happen. It was just a m it's inevitable. The only people that thought this wouldn't happen are basically Keynesians that think that any type of spending is fantastic. So, if the government spends into the economy, well, that's just going to put a band-aid over the problem. But it's not even a band-aid. The Keynesians think that if the government spends, then that fills the void, right, of aggregate demand. And that is kind of like a bridge that gets us to the other side where animal spirits kick in and the economy starts to accelerate again. So, they see all spending as good spending as opposed to someone like me. I say nah, not really. Government spending that's actually a net negative because of the distortions in the economy because that spending isn't due to a profit and loss motive. It's not due to a proper allocation of resources due to the price signal, right? Or due to basically consumer demand. And so what ends up happening is the Keynesian thinks that it's going to build this bridge to the other side to where the economy is going to reacelerate. But what it does is it just builds a bridge to the other side where things are a lot worse than they were to begin with. Let's keep going. So the next one is BJ. Now this is the the BJ's. I don't know what BJ's Let me go to the chat. Do you guys know what the heck BJ's? What is BJ's? Josh, have you ever heard of BJ's? Oh, Josh is gone. I'm Oh, it's like Oh, it's Costco, a warehousing business to business and business to consumer firm. Oh, okay. Cool, Jose. I appreciate that. I I I've never even heard of BJ's. Okay, let's go back to All right, the next one. Or actually, let me read what they're saying. Consumer conf and this is important if it's like a Costco for sure because they've really got their finger on the pulse of the consumer. Consumer confidence is at lows with consumer AC consumers across all income levels remaining cautious. H specifically inflation is putting clear pressure on the lowincome consumer. It's not exactly inflation. It's the fact that wages haven't gone up with inflation. Discretionary demand also remains pressured with many consumers exhibiting value seeking behavior. This is actually a theme that you're going to hear throughout. The next one is I. That is national vision. I don't know what national vision is. I assume it's like where you [snorts] get glasses kind of like a a lens crafters. You guys can correct me in the chat if I'm wrong. Their cash paying consumers remain a little depressed. Okay. With a delayed purchase cycle. However, some cash paying consumers are adopting higher price points. H. All right. So, I don't know. I don't really know what the takeaway is there. Are they they're comparing their cash consumers to people that are buying on layaway or with a payment plan? I'm not exactly what they're saying here. And then however, some cash paying consumers are adopting higher price points. Okay. Well, that gives us a little bit different angle here in terms of people buying glasses. Maybe they're trading. You know what though? I wonder if they sell AI glasses because as an example, when I was at at the New Orleans investment conference, I was with Josh and we went over to the mall because uh long story short is I can't get any shoes in Colombia because the largest size they have here is like a nine and I wear a 12. [laughter] So, if you've ever been to the New Orleans Investment Conference, it's actually attached to a mall. So, I'm like, great. This is a good opportunity for me to go get some shoes for next year. And so, I was over there buying some shoes and we just went by a sunglasses hut. And Josh was telling me that they came out with the meta glasses. In fact, I've got them right there. And I'm like, "Oh, yeah. Let me get the meta glasses so I can take pictures and you can actually live stream." I thought it'd be great for the next uh road trip to freedom challenge we do. But anyway, I mean, they're almost sold out and so I know this is a really really really hot item. So, and and they're about $485 if my memory serves me well. So, I'm curious as to whether this, however, some cash paying consumers are adopting higher price points are doing so because they're buying what do they call them? Smart glasses or something like that. There has been s and now this is FND which is floor and decor. Another one I've never heard of. There has been sustained softness in consumer demand, limited category growth in the flooring market. Consumer spending is likely to remain restrained on big ticket discretionary goods. Okay, that's interesting because if you're replacing your floor, I'm assuming they're selling like hardwood floors and what I mean that's a big big expenditure. So, the fact that people are really pulling back there, not surprising, but it is very good intel that we need to plug into our analysis. And again, just as a reminder here, guys, as soon as we get through this list, I'll I'll try to hurry it up. We're going to go over and check out today's uh inflation data and then see how that's changed the probabilities that the Fed cuts. Okay, where were we? GPC genuine I think there's auto parts store consumer remain cautious looking for best value external environment remains dynamic [laughter] that's a nice way of saying that the economy sucks marked by a [laughter] a fluid tariff landscape. Oh, maybe this is them having to pay the higher prices because we know through the data definitively that foreigners aren't paying the tariffs uh because import prices aren't going up and this import prices exclude tariffs. So, who who is who is really bearing the the brunt of the tariff cost? That would be the importers, the US importers. It's squeezing their margin. So, maybe this is referring to that heightened cost of inflation. And so they're trying to pass it on to the consumer and the consumers are are saying, "Ah, no, we don't have the money for it." And that's why their environment remains dynamic. [laughter] The stagnant market condition. Okay, moving on. Home Depot and Lowe's. Consumer uncertainty continued. Pressure on housing continued disport disproportionately impacting home improvement demand. Okay. Uh, now Lowe's says US homeowner remains healthy. Balance sheets are strong. They say that that's really interesting, huh? Because I, as you know, when I retired in 2012, I went out and bought a bunch of rental properties and I I kind of managed the rehab process myself and most, you know what the difference is? Because I would go to Lowe's and Home Depot. It seemed like Home Depot had more of the contractors that would go there and Lowe's had more of like the soccer moms that would go there. That was just my that was my take on it. So maybe that's why we're seeing a discrepancy. LTH Oh, so this is Lifetime Health and Fitness. And of course, what do you think they're going to say? If you guys don't know what Lifetime is, it's a really high-end gym. They're not seeing anything different or new trends in the consumer base. Yeah, because everyone that goes there is rich. [laughter] So, that's Yeah, the rich people are doing great. It's everyone else, not so much. Uh, consumers are responding well to their value incentives. Okay, that's MODG, which is uh Oh, that was Topgolf or which is O'Reilly. pretty much saying the same thing as the other auto parts they or auto parts stores they expect to continue seeing consumer remain conservative. They also believe the dynamic consumer under uncertainty is felt industrywide. Yep, I think they're spot on there. Target consumers are choiceful, stretched budgets, prioritizing value. They are spending mostly on essentials, food, beauty, while looking for trend right deals in discretionary. There are declines in consumer confidence. Consumers remain cautious for the holidays but are still interested in celebrating seasonal. Of course they are. Why? Why would you even say that? But are still interested in celebrating the holiday? Well, yeah, they're not going to cancel Christmas. [laughter] Sorry. Sorry, little Jimmy and Susie. We're we're we're cancelling uh Thanksgiving. [laughter] Oh jeez. Okay. Consumer remains discerning in their spending. Okay. That was according to Tractor Supply. Then Walmart consumers are moving to companies that provide the most value. They are also moving their spending to necessities. There's some moderation spending for lower income. Okay. Yeah. So, pretty much the same thing that Target is saying. And then WSM, which is Williams and Synoma, I think they're assuming no changes. Yeah, because rich people go there. So, that would all make sense. All right. Now, let's go over to the PPI data. And um let's start with the calendar that I always like to go to. So, quick snapshot, guys. We got the PPI and this was a.3. But what's really interesting here is the core PPI which only came in at a 0.1. The expectations were for a.3 uh PPI year-over-year dropped down to 2.7 core at 2.9 which is consistent with the last reading. Now this also is not the most recent report due to the shutdown. This is for September. So kind of u take that into consideration. So now let's click on this and US retail sales.2 okay minus autos.3 which is at expectations. So autos are a drag. Again, this is not uh surprising, especially if you've been following my videos and you saw what happened to CarMax and they just got shellacked. Just absolutely smoked. And full disclosure, I was fortunately I was short CarMax and uh that that was a that was a big big winner for me. So that that was I was happy to see that in terms of my portfolio, not for the overall economy. Let's go to the details. PPI, wholesale inflation was fairly tame. Now, PPI is producer price index for those of you who are kind of noobs here uh before government shutdown. But PPI might not sway Fed rate cut vote. Well, let's find out. Let's go over to the CME group. We're going to look at Fed Watch. And well, that's not good. What did did China hack into CME? Whoa. What's going on here? [laughter] Let's refresh. Okay, 14 days. Whoa. Okay, that's a big different. Look at this. Wow. So, this was all It's not showing what it was like a week and a half ago, but a week and a half ago when we got the the government shutdown when it ended and everyone's like, "Yay, the economy is going to boom. Woohoo. Woo, the Fed doesn't have to cut interest rates. And then Jerome Pal came out and was talking very hawkish and the odds I remember well because I did videos on it. The odds of a rate cut went down to like uh I think it was like 35% something. So say 35% rate cut only 65% or uh 65% for a pause. Okay. And then a week ago we go 50/50. But now look at what's happened due to everything we're talking about in this video. Now the probability of a rate cut is 85%. 84.9 and of course a pause now at 15.1. So, how times have changed in just just a week, just a week or a week and a half or so, you have this massive swing from the odds of a pause going from 30 35% all the way up to 85%. And look, one of the things I've had a great year as far as as my portfolio and uh I we talk about this all the time. Well, we don't talk about how great my portfolio is, but we talk about >> [laughter] >> kind of the the the strategies, the contrarian strategies that have worked extremely well. We talk about them in Rebel Capitals Pro all the time, but I I do the the trade alerts there. And one of the things that's really really worked well for me this year is just asking myself, what is the market telling me? And I know it sounds kind of weird, but it like let me give you an example here. Let's go over to the 2-year. And for full disclosure, again, I have been long the two-year Treasury through the futures market. I I've I've long I'm I'm long um two-year futures, which is the ticker uh ZT ZT. Z is in zebra, T is in Thomas. And I actually had to close the position today because I've got to roll it over because of expiration. and blah blah blah blah blah. But let's go over to year-to date and you can see what the two-year Treasury yield has done. It's just it's just gone straight down. I mean, trend is your friend. There's a good trend. And what happens is every single time we kind of get a a knee-jerk up due to Jerome Powell coming out and being hawkish, the market bumps up, but then kind of right back down. And then we get this bump up and right back down. And then remember in April when everyone was saying that interest rates are going to 20% and no one's buying treasuries, foreigners are dumping the debt, the deficits, blah blah blah blah blah. We see interest rates go up and then start to roll over, come back down. So what this chart is telling me, and maybe I'm misinterpreting it, but it's telling me interest rates want to go down. So, it's like the two-year just kind of reaching out of the screen and grabbing me and taking my shirt and saying, "George, I want to go down. I want I want to go down and I'm going to go down." And well, I shouldn't say that. It's not that I'm going down. I want to go down. I want to go down. So, whenever I I and I try to pick up on that. So whenever I've seen, you know, a big bump up de due to like the government shutdown, I think that was the last time I added to the position because the the okay, no more government shutdown, growth in inflation expectations increase, the 2-year Treasury goes up to 363, I think it was. And so I'm like, I'm going to fade that all day long because this is going against what the 2-year is telling me it wants to do. And sure enough, you know, the data comes out that that's the market's weak or the labor market is weak, PPI is weak, and then you just see it roll right over like it has pretty much every single time. And that's uh because especially because the leverage in futures um I made a lot of money on that, a lot of money. And it's just kind of paying attention to maybe a a more professional way to say it is paying attention to this or paying attention to the signal that you're getting from the price action. But I just wanted to kind of uh share that with you guys. But, uh, you know, it's no surprise here that interest rates are down almost four basis points on the 2-year due to what we're seeing in the PPI. And then obviously, this is also expressed through the odds changing quite significantly of a Fed rate cut in December. And that's not trading advice, that's not investing advice, any of that stuff. I'm just kind of sharing with you guys um what I've been doing and we get into the details in in Rebel Capitals Pro. If you want to uh check out check that out, there'll be a link in the description here. But let's go back to curious the 10-year today. Wow. Okay, the 10 years down. Look at that. Is and this is a great example of narrative verse reality. You guys know on this channel I pound the table constantly, constantly, constantly on the idea that growth and inflation expectations are much more powerful in terms of their impact on interest rates, especially at the long end of the curve, than debt and deficit expectations. So, look at what's happened to the 10-year Treasury this year. I mean, we get up to 4 point I don't know what that is. 75 and now we're down 75 basis points. [laughter] Now, let me ask you a question. Has the debt gone down? Wrong. What's the debt now? 38 trillion. But what's what's happened here? Well, growth and inflation expectations have gone down and you get some noise in here like we saw after retardation day, but then the market just goes right right back to kind of where it was. And there's a mechanical reason for this. It's not just, well, I don't know, the foreigners are stupid and they're just continuing to buy the treasuries. It'll blow up on them one day. No, that's not the reason. [laughter] There there's a mechanical reason for this. And once you understand that mechanical reason, it gives you a huge huge edge. It's just you got to have an open mind and you can't be dogmatic about it like um a lot of people are in terms of the dollar and in terms of interest rates. If if you you know, you've got to decide do do you want to be part of a religion or do you want to be part of a cult? Do you want to be part of a movement? or do you want to make money? And if you're if you want to be part of a movement, that's great. That's fine. But you you've got to realize that that's your priority because if you want to make money, you got to be agnostic about this stuff. You got to be completely and totally agnostic. And you know, based on the narrative that we were hearing back when, you know, the foreigners are dumping treasuries, no one's going to buy the the 10-year anymore, all the central banks are dumping and blah blah blah. Now, that was true, but that doesn't mean that it impacts interest rates because your marginal buyer is going to be the banks and they've got an infinite balance sheet. So anyway, it's just I think it's interesting that during this time when and even when it was going down even now I still occasionally listen to a podcast where the person will be saying well you know I mean interest rates are are really going up the Fed's losing control of interest rates even though the 10 years trading lower than Fed funds. [laughter] It's like have you looked at a chart in the last I don't know year? Uh probably not. So, let's see what we've got next week, ladies and gents. I thought we had initial claims this week. Oh, maybe not. Oh, got ADP next week. We're going to have to really pay attention to that. And here we go. Initial initial claims next Thursday. Okay, I misread that. Oh, and PCE, that's going to be huge, too. That's going to be really, really huge. All right, guys, on that bombshell, enjoy the rest of your afternoon. As always, make sure you are standing up for freedom, liberty, free market capitalism. If you want to check out all the insider intel and the contrarian strategies that we're using right now to get uh some great returns, this year's been awesome. I think this month alone I'm up maybe 9% or so which is really impressive considering I'm like 60% in T bills. [laughter] So anyway, if you want to check out the insider intel in Rebel Capitals Pro, uh just go ahead and click the link in the description below and I will see you on the next video.