Holy Sh*t…Did You See What Just Happened In The Market!?
Summary
Market Outlook: Speaker highlights worst October job-cut announcements in 22 years, a still-inverted yield curve, and falling Treasury yields as signals of an economic slowdown.
US Treasuries: Emphasis on declining growth and inflation expectations driving the 2-year and 10-year yields lower, positioning Treasuries as a favored trade.
Automotive Retail: Used cars cited as a key real-economy barometer, with CarMax signaling consumer stress via weak Q3 outlook and leadership change.
CarMax (KMX): Shares plunged ~24% on the day and ~62% YTD; CEO ouster and weak guidance reflect deteriorating demand in used autos.
Restaurants: Restaurants flagged as another consumer health gauge, indicating pressure when traffic and spending soften.
Chipotle (CMG): Reported poor same-store sales, with weaker spending notably among younger demographics, underscoring consumer belt-tightening.
Risks & Catalysts: Upcoming nonfarm payrolls could swing yields sharply; broadening layoffs and weak hiring plans reinforce downside risks to consumer-exposed equities.
Transcript
Hello fellow Rebel Capitals. Hope you're well. I am here in New Orleans. I was speaking at the New Orleans Investment Conference, but today's big day. Wanted to do a live stream. We have the AI stocks that I don't know if they're crashing, but they're definitely going down. But there's big big moves in other stocks that I think really reflect what's going on in the overall economy. And we've got Treasury yields down big as a result of the biggest job cuts announcements in 22 years. Let me repeat. I probably didn't say that right. The biggest job cut announcements in 202 years today. And obviously that's what's really driving interest rates down huge. And uh and I think connecting the dots here, you'll see what's happening with some of these other not AI stocks, but real economy stocks that show the pressure that I think the average Joe and Jane is under right now and kind of uh what we've been seeing in the labor market in terms of the non-farm payrolls. Okay, but let's get into it here. First and foremost, I want to go over to CNBC and I want to play this quick video because they're going to summarize what's happening with this most recent report, which as you can see, job cuts in October hit highest levels for the month in 22 years. 22 years. I mean, it's staggering. But let's uh Josh, can you hear this? >> Latest numbers from >> Could you hear that audio? >> Yep. Okay, let me turn it up here just as far as it'll go. Okay, here we go, guys. Let's let's listen and I'll give you my commentary. Then we'll go through the article, read the details, and then we'll go over see how the treasuries, as you can, you know, down a lot, but we'll uh see how much they're down, and then we'll go over into some of these real economy stocks here that are also plummeting. >> Calinger on job cuts. What's going on? Yeah. Well, this is like a a clue from like a cough or or a sneeze or whatever. But announced corporate job cuts, Andrew, in the US surging past 1 million so far this year with 153,000 new layoffs announced just in October according to Challenger. That is the worst October since 2003. Here are the numbers. October up 153. That compares with September. That's 100,000 more than September and 100,000 more than this time last year in October 2024. Andy Challenger commenting, "Some industries are correcting after the hiring move of the pandemic, but this comes as AI adoption, softening consumer and corporate spending and rising cost drive belt tightening and hiring freezes." Okay, so let let's go over that a little bit here. And you know, I I hate to pat myself on the back or like that. And I I get a lot of flack on this channel and I get a lot of trolls on Twitter and they sit there and say, "Oh, you're too bearish. You're too bearish." I'm like, "Look, it's not me. It's not George Gammon that's bearish. It's just the yield curve. Just look at the yield curve." And that tells you pretty much, it usually tells you, not everything that you need to know, but it gives you a lot of information as to what's happening with the underlying economy. So all I am is is really the the messenger. And so many people have said, "Oh, it's different this time. It's different this time. The yield curve is dead. Oh, it's the the only reason the yield curve is inverted is because of issuance and blah blah blah blah blah blah blah." And I'm like, "Yeah, I don't know. I think the probabilities are high that this time it's not different." that we don't know when the cycle plays out, but we do know that the odds are the cycle plays out in the same way that it typically plays out because there's a mechanical reason outside of issuance as to why the yield curve inverts to begin with. And let's remember that the 10-year Treasury is still trading right around Fed funds. A lot of the curve is still inverted based on Fed funds. So when the cur when when when the when the economy is booming, when the economy is doing well, you don't have a flat yield curve. Like that's that's not how it works. The yield curve is steep. And so we've just been accustomed to flatter inversion, almost flat. And like as though that's the norm. And it's like, well, the stock market isn't crashing, so obviously the economy is doing great. like what? There's a total disconnect. There's a bifurcation. In fact, there's might be an inverse correlation. But what we're seeing here, let me read this. Some interest, some industries are correcting after the hiring boom of the pandemic. What is that, guys? We've talked about that on this channel for two years. That's the bullhip effect. That is the bull whip effect. I've talked about on this channel. I've talked about on my whiteboard videos where you have this artificial demand, this sugar rush. due to the government intervention in the economy and all the businesses think that that's just going to last forever. And so they hire accordingly and then all of a sudden you got no more sugar rush, you get the crash, you get the hangover the next day and we're like, "Wait a minute, we got way too many people relative to the new demand, the new reality." It's when narrative meets reality. Reality always wins. It just takes time. So in addition to that they say but this comes as AI adoption softening consumer I think is what it says and corporate spending and then the corporations have to tighten their belt because of raising rising input costs. Tariffs tariffs that they don't want to pass on to the consumer because they know the demand just isn't there. They just know that demand is not there and so they're in a very difficult position. So they and you and there's always a transition phase. It always goes from hiring to not hiring to firing. And we were in the not hiring phase for so long. And it seems like now based on this study we might or this um this report that we might go in we might be headed into the firing phase. That's when you see the unemployment rate spike. And that's why usually you get uh let me pull up a chart of the unemployment rate. And that's why you usually get a chart that looks like this. when when you're in the stuff hitting the fan zone, that's when the unemployment rate spikes. And this is just the cycle we see over and over and over again. >> Are you trying to show a new screen right now? >> Yeah, I know you can't see it. I know you can't see it, but just we'll we'll go to it in a second here. Uh because I want to get back to the video, but uh actually remind me Josh, let's get back to the video. Then I'll switch up the screen share and then I want to show the unemployment rate because I want to show the viewers how consistent that is with the recessions that we've had in the past. Another thing we've said on the videos that is kind of coming to fruition is it's all about the labor market. All about the labor market. All about the labor market. Announced layoffs don't always lead to actual cuts and could take place from attrition. But the report puts in perspective what we've been reporting here day after day, week after week. Series of marquee announcements unveiled in recent weeks across US industries including UPS, Amazon, Target among others, Paramount, Rivian, all these companies there. Government has been responsible year to date for 308,000. But look at that tech 141. could be where you see a lot of the AI, maybe some in warehousing, but a big chunk of that's going to be um UPS as well as potentially some hit from reduced uh u uh flows of trade. Retail's up there, as is services at 64,000. You take out the Doge cuts, the numbers a bit better at 800,000, but still well above last year. Challenger doesn't see much in the way of hiring, saying announcements are 35% below last year, and they're skeptical about the number of new hires for the holiday season. For some on the Fed, this data together with other reports could be the sign they're looking for of job weaknesses uh about whether to cut in December. Well, guess what? We get to ask a member of the Fed that question directly 8:30 when we sit down with Chicago. >> Okay, I think that's pretty much the gist of it. And you know, so many people and assuming this stuff hits the fan, so many people are going to say, "Well, nobody could have predicted this. Nobody could have predicted this. It wasn't possible. Well, actually, you could have predicted this and it would have taken you about, I don't know, maybe eight seconds just to look at the yield curve. I mean, let's just for the new viewers, I just want to remind everyone. Uh, actually, let me switch up the screen share, Josh. Okay, so I want to go over to the yield curve first and then we'll go over to the unemployment rate. So don't forget that. But here here's the yield curve. So just looking at this guys, c could could you have predicted this and when I say this, I'm not talking about a recession. I'm not talking about a GFC. I'm just talking about the economy slowing down, nominal GDP likely declining, right? Could you have predicted this back when the yield curve is inverted and then when it uninverts? I mean, how could you not have predicted this? Well, well, I know how you could have not predicted it because every single time this happens, it's always different this when you're in this phase of it right here or right here. It's always it's different this time. Fill in the blank. It's always different this time because blah blah blah blah blah. Always. Oh, it's different this time because blah blah blah blah blah blah blah. And then once the stuff hits the fan or the economy slows significantly or contracts, then it's, oh, well, nobody could have predicted that. I mean, what are we talking about here? What are we talking about? Right? A fourth grader could have predicted this. Now, you can't predict the timing. You cannot predict the timing, but the cycle it's it's pretty much as plain as day. And is there a certainty that it plays out this way? No. Absolutely. That's not what I'm saying. It's not what I'm saying. We could see the economy completely boom from here. I don't know. We could see the curve invert again. I don't know. But we're just playing a game of odds. And when you look at a chart like this that's so repetitive, so consistent going all the way back to the 198. In fact, we could take it back to the 1950s and you'd see the exact same cycle over and over and over again. It's just the chances are that this time it plays out the same way. Oh, but it's different this time. It's always different this time. And people always have great reasons as to why it's different. And it never is. It never is. Okay. Now, let's get over to the unemployment rate. And this is why I think the challenger survey is so important along with what we're seeing in non-farm payroll. Now, let's remember on the other side there, we got ADP that came out where it was at 42,000 and the expectations were for about 35. So, it did exceed expectations. But let's remember that 40 or 42,000 in and of itself is terrible. That is terrible in an economy of 350 million people. So yes, it was higher than expectations, but expectations were in the toilet. So I I don't know that that's a lot to be positive about if you're let's just say say bullish. But look at what happens here. It's all I say all about the labor market. All about the labor market. All about the labor market. You see the unemployment rate spike every single time you get into one of the when the stuff really hits the fan. But keep in mind this is not a leading indicator at all. As you can see when the when the unemployment rate really spikes that's when you know you're already in the thick of it. You're already in the thick of it regardless of what the NBER is saying because remember they always report a year later after the recession actually hits. So, they're always looking in the rearview mirror, but you see how important it is to focus on the ADP numbers, the non-farm payrolls, and the, you know, these surveys of job cuts, job creation, layoffs, etc., or just attrition, right? If if they're not hiring due to attrition, which is just basically we're not going to hire anyone. Anyone that quits, we're just going to not fill that position. That in and of itself means fewer jobs in the United States, which has pretty much the exact same effect. And that's decreasing aggregate demand, which takes the economy further south, which often leads to an actual official uh recession. So, now let's go over some of these stocks that have really just taken it on the chin today. But I think it's it's not just about the share price. It's also about the type of stock that uh we're seeing decline and how that is, I think, much more representative of the real economy than, you know, Nvidia or something like that. So, um, the one I really want to focus on here is CarMax. And I don't I don't have it pulled up. Let me pull up a chart, Josh. And the ticker here is KMX. So, let's go to a year-to- date chart. I mean, let's just go to a fiveday chart, and you can see what what I'm talking about here. Um, this right here, in fact, we can't see because it opened so much lower, but this right here, Ky Wy Coyote thing, that's today. So, right, look at this. Just today, it's down 26%. Today, today it's down 26%. Um, or excuse me, in the last five days. last 5 days. I'm sorry. Today it's down 24.5%. 24.5%. Year-to- date it's down 62%. 62%. You say, "George, why on earth is it down so much today?" Again, 24.5%. Because they just fired the CEO. They just fired the CEO and they came out. In fact, let's go to the Wall Street Journal. I forgot I had an article pulled up here. So, CarMax cuts ties with CEO, meaning they fired him. Cuts ties. It sounds a little bit better, right? Expects weak third quarter. So, they gave kind of insights as to what the third quarter is looking like. I don't think it was an official announcement, but they basically prepared the market saying it's ugly. Like, it's bad. It's really bad. And I think this is so important because there are some things out there that really represent how the average Joe and Jane are doing. I think used cars is one of them. And I think restaurants are another. So, if restaurants are really taking it on the chin, if they're reporting a huge decline, which by the way, Chipotle, I don't know if I did a video on that because I've been kind of off the grid, so to speak, for the last week and a half because I've I've been speaking and doing all and traveling a lot. So, I don't even know if I did a video on Chipotle, but if you guys saw the news there, they're reporting terrible terrible same store sales. Uh, they came out and said that basically same thing. the consumer's weak. The consumer is not spending money. Uh they're tightening their belts, especially at the the the lower age demographics that go to Chipotle all the time. So, when you're seeing Chipotle and CarMax really really suffering, I I think that tells you almost everything that you need to know about what's happening in the real economy. And then when you combine that with the survey data we're getting from corporations. So this isn't about the government data. It's not about the government firing. It's not about blah blah blah blah blah. That's just looking at corporations, right? The private sector, which we should be most focused on if we're trying to predict what's going to happen in the real economy. And they're saying that they're laying off more or they're cutting jobs more than they have in the last 22 years. 22 year. That includes the GFC. That includes the surveis sickness for heaven's sakes. And when you combine all of this together, it's no surprise that yields are plummeting today. Now, it is true they were up a bit due to the ADP numbers, but this is not investing advice at all, but that was your opportunity. That was your opportunity right there because I think the market was way, way off sides. So, let's look at what the two-year Treasury is doing today. Down about seven basis points, which you guys know is a big move in the Treasury market. And um in full disclosure here before we move on, I I want to be very very clear. Uh going back to the CarMax thing, I am short this stock or I was I was I've been short CarMax for maybe two months and I had a big big big position. I had added to my position um at least once that I can remember. So, I had a big big position, short position in CarMax, uh, which I sold today. Um, so just full disclosure. And then going over to the 2-year Treasury, uh, I have a big big long position in the two-year Treasury as well. And if you guys want more kind of insider information on that, you can check out Rebel Capitalist Pro because whenever I make a change to my portfolio, which by the way is not paper trading, it's it's real money. Um I I do a trade alert in I I just did one I can show you guys. So this is the trade alert that I just did for our members based on me selling uh CarMax. But if you would have been a member of Rebel Capitals Pro, you would have known that I was buying it and and building the position to begin with. Same thing with the two-year Treasury. But Josh, go ahead and put a link in the description for people who want to check out uh Rebel Capitals Pro. But anyway, this is not about Rebel Capitals Pro. Uh, this is about the layoffs and then getting back to the 10-year Treasury. That's right. That's where I was going with it. So, we look at the 10-year Treasury. We were looking at the two-year. The 10-year is down about seven basis points today as well. And what is the 10-year Treasury really reflecting? You guys know the answer to this. It's growth and inflation expectations. That has nothing to do with supply or issuance or deficits and debt or anything like that. It's growth and inflation. So when you see the basically the 10-year Treasury trading around Fed funds, that tells you that growth in inflation expectations are really bad. Really bad. And that's why it goes down today. And obviously it's trading off of this data that we get that we got from the surveys saying that the jobs cuts or layoffs or whatever they were are the worst we've seen in 22 years. 22 years. And I think I don't even think the the 10ear is even pricing in kind of the anecdotal evidence that I think is maybe even more important with uh Chipotle and with CarMax. But uh you know again this is not I want to be very clear this is not trading advice or investing advice at all. I'm just sharing with you guys my thoughts and what I'm doing in my own portfolio. But I I think the trend is really down here in the 10-year, especially the two-year uh because it went up so much when when uh Jerome Pal gave that hawkish speech and he didn't even say that he wasn't going to raise rates, but that's the way the market perceived it. And so then you see yields going up because growth in inflation expectations increase and you know, oh no, now the Fed's not going to cut because they're worried about inflation or something like that. And then they just get the right hook from Tyson. And when we get the the challenger survey and then we get the stuff from CarMax and then they're like, "Oh, wait. We forgot." Regardless of what Jerome Pal is saying, we look at the data and the data is going straight down. The data is getting worse and worse and worse. And that's why you look at the trend here. So, let's just look at a year-to- date chart of the two-year Treasury. and that trend is down down down. So that's really the the big news. I mean, I I can't overstate how important it is that we not only get a beat on ADP and it's still bad when you would kind of step back and zoom out and then you get the uh Challenger survey worst in 22 years. And then you see Chipotle, then you see all these real economy carax down 23 24% in just one day. And so we have no crystal ball. I I'm not sitting here telling you that I can predict the future, but I can tell you that I watch the yield curve. And I can tell you that watching the yield curve has given me a huge massive edge in my own portfolio and kind of you know that's one of the big reasons why I took a long position in the two-year. It's one of the main reasons why I took a big short position in uh CarMax and then a lot of these other trades that more recently have really really gone in my favor if I if I if I wasn't so researched in the yield curve. Uh I don't know that I would have done that. I don't know that I would have done that. I It's given me a huge edge. So anyway, if you want to check out Rebel Capitals Pro, Josh put a a link in there and we'll have to keep watching this guys. I don't you know the thing is with the government shutdown, when are we going to get the non-farm payroll? Because that's the biggie. That's the biggie. And when we get it, I think there's going to be even a a bigger impact than there otherwise would have been because we've been absent the non-farm payroll for so long. So, this is something that could have a massive massive move or the market could move in a huge I mean, who knows what yields could do. They could go up or down by 20 basis points due to the next non-farm payroll. So, that's what we're really really going to have to pay attention to. All right, guys. On that bombshell, enjoy the rest of your afternoon. I'm not sure if I'll do another live stream this week because I'm traveling and in New Orleans, all those things. And so, if I don't, we'll see you next week. If I do, well, regardless, always stand up for freedom, liberty, free market, capitalism. And whenever it is, I'll see you in the next video.
Holy Sh*t…Did You See What Just Happened In The Market!?
Summary
Transcript
Hello fellow Rebel Capitals. Hope you're well. I am here in New Orleans. I was speaking at the New Orleans Investment Conference, but today's big day. Wanted to do a live stream. We have the AI stocks that I don't know if they're crashing, but they're definitely going down. But there's big big moves in other stocks that I think really reflect what's going on in the overall economy. And we've got Treasury yields down big as a result of the biggest job cuts announcements in 22 years. Let me repeat. I probably didn't say that right. The biggest job cut announcements in 202 years today. And obviously that's what's really driving interest rates down huge. And uh and I think connecting the dots here, you'll see what's happening with some of these other not AI stocks, but real economy stocks that show the pressure that I think the average Joe and Jane is under right now and kind of uh what we've been seeing in the labor market in terms of the non-farm payrolls. Okay, but let's get into it here. First and foremost, I want to go over to CNBC and I want to play this quick video because they're going to summarize what's happening with this most recent report, which as you can see, job cuts in October hit highest levels for the month in 22 years. 22 years. I mean, it's staggering. But let's uh Josh, can you hear this? >> Latest numbers from >> Could you hear that audio? >> Yep. Okay, let me turn it up here just as far as it'll go. Okay, here we go, guys. Let's let's listen and I'll give you my commentary. Then we'll go through the article, read the details, and then we'll go over see how the treasuries, as you can, you know, down a lot, but we'll uh see how much they're down, and then we'll go over into some of these real economy stocks here that are also plummeting. >> Calinger on job cuts. What's going on? Yeah. Well, this is like a a clue from like a cough or or a sneeze or whatever. But announced corporate job cuts, Andrew, in the US surging past 1 million so far this year with 153,000 new layoffs announced just in October according to Challenger. That is the worst October since 2003. Here are the numbers. October up 153. That compares with September. That's 100,000 more than September and 100,000 more than this time last year in October 2024. Andy Challenger commenting, "Some industries are correcting after the hiring move of the pandemic, but this comes as AI adoption, softening consumer and corporate spending and rising cost drive belt tightening and hiring freezes." Okay, so let let's go over that a little bit here. And you know, I I hate to pat myself on the back or like that. And I I get a lot of flack on this channel and I get a lot of trolls on Twitter and they sit there and say, "Oh, you're too bearish. You're too bearish." I'm like, "Look, it's not me. It's not George Gammon that's bearish. It's just the yield curve. Just look at the yield curve." And that tells you pretty much, it usually tells you, not everything that you need to know, but it gives you a lot of information as to what's happening with the underlying economy. So all I am is is really the the messenger. And so many people have said, "Oh, it's different this time. It's different this time. The yield curve is dead. Oh, it's the the only reason the yield curve is inverted is because of issuance and blah blah blah blah blah blah blah." And I'm like, "Yeah, I don't know. I think the probabilities are high that this time it's not different." that we don't know when the cycle plays out, but we do know that the odds are the cycle plays out in the same way that it typically plays out because there's a mechanical reason outside of issuance as to why the yield curve inverts to begin with. And let's remember that the 10-year Treasury is still trading right around Fed funds. A lot of the curve is still inverted based on Fed funds. So when the cur when when when the when the economy is booming, when the economy is doing well, you don't have a flat yield curve. Like that's that's not how it works. The yield curve is steep. And so we've just been accustomed to flatter inversion, almost flat. And like as though that's the norm. And it's like, well, the stock market isn't crashing, so obviously the economy is doing great. like what? There's a total disconnect. There's a bifurcation. In fact, there's might be an inverse correlation. But what we're seeing here, let me read this. Some interest, some industries are correcting after the hiring boom of the pandemic. What is that, guys? We've talked about that on this channel for two years. That's the bullhip effect. That is the bull whip effect. I've talked about on this channel. I've talked about on my whiteboard videos where you have this artificial demand, this sugar rush. due to the government intervention in the economy and all the businesses think that that's just going to last forever. And so they hire accordingly and then all of a sudden you got no more sugar rush, you get the crash, you get the hangover the next day and we're like, "Wait a minute, we got way too many people relative to the new demand, the new reality." It's when narrative meets reality. Reality always wins. It just takes time. So in addition to that they say but this comes as AI adoption softening consumer I think is what it says and corporate spending and then the corporations have to tighten their belt because of raising rising input costs. Tariffs tariffs that they don't want to pass on to the consumer because they know the demand just isn't there. They just know that demand is not there and so they're in a very difficult position. So they and you and there's always a transition phase. It always goes from hiring to not hiring to firing. And we were in the not hiring phase for so long. And it seems like now based on this study we might or this um this report that we might go in we might be headed into the firing phase. That's when you see the unemployment rate spike. And that's why usually you get uh let me pull up a chart of the unemployment rate. And that's why you usually get a chart that looks like this. when when you're in the stuff hitting the fan zone, that's when the unemployment rate spikes. And this is just the cycle we see over and over and over again. >> Are you trying to show a new screen right now? >> Yeah, I know you can't see it. I know you can't see it, but just we'll we'll go to it in a second here. Uh because I want to get back to the video, but uh actually remind me Josh, let's get back to the video. Then I'll switch up the screen share and then I want to show the unemployment rate because I want to show the viewers how consistent that is with the recessions that we've had in the past. Another thing we've said on the videos that is kind of coming to fruition is it's all about the labor market. All about the labor market. All about the labor market. Announced layoffs don't always lead to actual cuts and could take place from attrition. But the report puts in perspective what we've been reporting here day after day, week after week. Series of marquee announcements unveiled in recent weeks across US industries including UPS, Amazon, Target among others, Paramount, Rivian, all these companies there. Government has been responsible year to date for 308,000. But look at that tech 141. could be where you see a lot of the AI, maybe some in warehousing, but a big chunk of that's going to be um UPS as well as potentially some hit from reduced uh u uh flows of trade. Retail's up there, as is services at 64,000. You take out the Doge cuts, the numbers a bit better at 800,000, but still well above last year. Challenger doesn't see much in the way of hiring, saying announcements are 35% below last year, and they're skeptical about the number of new hires for the holiday season. For some on the Fed, this data together with other reports could be the sign they're looking for of job weaknesses uh about whether to cut in December. Well, guess what? We get to ask a member of the Fed that question directly 8:30 when we sit down with Chicago. >> Okay, I think that's pretty much the gist of it. And you know, so many people and assuming this stuff hits the fan, so many people are going to say, "Well, nobody could have predicted this. Nobody could have predicted this. It wasn't possible. Well, actually, you could have predicted this and it would have taken you about, I don't know, maybe eight seconds just to look at the yield curve. I mean, let's just for the new viewers, I just want to remind everyone. Uh, actually, let me switch up the screen share, Josh. Okay, so I want to go over to the yield curve first and then we'll go over to the unemployment rate. So don't forget that. But here here's the yield curve. So just looking at this guys, c could could you have predicted this and when I say this, I'm not talking about a recession. I'm not talking about a GFC. I'm just talking about the economy slowing down, nominal GDP likely declining, right? Could you have predicted this back when the yield curve is inverted and then when it uninverts? I mean, how could you not have predicted this? Well, well, I know how you could have not predicted it because every single time this happens, it's always different this when you're in this phase of it right here or right here. It's always it's different this time. Fill in the blank. It's always different this time because blah blah blah blah blah. Always. Oh, it's different this time because blah blah blah blah blah blah blah. And then once the stuff hits the fan or the economy slows significantly or contracts, then it's, oh, well, nobody could have predicted that. I mean, what are we talking about here? What are we talking about? Right? A fourth grader could have predicted this. Now, you can't predict the timing. You cannot predict the timing, but the cycle it's it's pretty much as plain as day. And is there a certainty that it plays out this way? No. Absolutely. That's not what I'm saying. It's not what I'm saying. We could see the economy completely boom from here. I don't know. We could see the curve invert again. I don't know. But we're just playing a game of odds. And when you look at a chart like this that's so repetitive, so consistent going all the way back to the 198. In fact, we could take it back to the 1950s and you'd see the exact same cycle over and over and over again. It's just the chances are that this time it plays out the same way. Oh, but it's different this time. It's always different this time. And people always have great reasons as to why it's different. And it never is. It never is. Okay. Now, let's get over to the unemployment rate. And this is why I think the challenger survey is so important along with what we're seeing in non-farm payroll. Now, let's remember on the other side there, we got ADP that came out where it was at 42,000 and the expectations were for about 35. So, it did exceed expectations. But let's remember that 40 or 42,000 in and of itself is terrible. That is terrible in an economy of 350 million people. So yes, it was higher than expectations, but expectations were in the toilet. So I I don't know that that's a lot to be positive about if you're let's just say say bullish. But look at what happens here. It's all I say all about the labor market. All about the labor market. All about the labor market. You see the unemployment rate spike every single time you get into one of the when the stuff really hits the fan. But keep in mind this is not a leading indicator at all. As you can see when the when the unemployment rate really spikes that's when you know you're already in the thick of it. You're already in the thick of it regardless of what the NBER is saying because remember they always report a year later after the recession actually hits. So, they're always looking in the rearview mirror, but you see how important it is to focus on the ADP numbers, the non-farm payrolls, and the, you know, these surveys of job cuts, job creation, layoffs, etc., or just attrition, right? If if they're not hiring due to attrition, which is just basically we're not going to hire anyone. Anyone that quits, we're just going to not fill that position. That in and of itself means fewer jobs in the United States, which has pretty much the exact same effect. And that's decreasing aggregate demand, which takes the economy further south, which often leads to an actual official uh recession. So, now let's go over some of these stocks that have really just taken it on the chin today. But I think it's it's not just about the share price. It's also about the type of stock that uh we're seeing decline and how that is, I think, much more representative of the real economy than, you know, Nvidia or something like that. So, um, the one I really want to focus on here is CarMax. And I don't I don't have it pulled up. Let me pull up a chart, Josh. And the ticker here is KMX. So, let's go to a year-to- date chart. I mean, let's just go to a fiveday chart, and you can see what what I'm talking about here. Um, this right here, in fact, we can't see because it opened so much lower, but this right here, Ky Wy Coyote thing, that's today. So, right, look at this. Just today, it's down 26%. Today, today it's down 26%. Um, or excuse me, in the last five days. last 5 days. I'm sorry. Today it's down 24.5%. 24.5%. Year-to- date it's down 62%. 62%. You say, "George, why on earth is it down so much today?" Again, 24.5%. Because they just fired the CEO. They just fired the CEO and they came out. In fact, let's go to the Wall Street Journal. I forgot I had an article pulled up here. So, CarMax cuts ties with CEO, meaning they fired him. Cuts ties. It sounds a little bit better, right? Expects weak third quarter. So, they gave kind of insights as to what the third quarter is looking like. I don't think it was an official announcement, but they basically prepared the market saying it's ugly. Like, it's bad. It's really bad. And I think this is so important because there are some things out there that really represent how the average Joe and Jane are doing. I think used cars is one of them. And I think restaurants are another. So, if restaurants are really taking it on the chin, if they're reporting a huge decline, which by the way, Chipotle, I don't know if I did a video on that because I've been kind of off the grid, so to speak, for the last week and a half because I've I've been speaking and doing all and traveling a lot. So, I don't even know if I did a video on Chipotle, but if you guys saw the news there, they're reporting terrible terrible same store sales. Uh, they came out and said that basically same thing. the consumer's weak. The consumer is not spending money. Uh they're tightening their belts, especially at the the the lower age demographics that go to Chipotle all the time. So, when you're seeing Chipotle and CarMax really really suffering, I I think that tells you almost everything that you need to know about what's happening in the real economy. And then when you combine that with the survey data we're getting from corporations. So this isn't about the government data. It's not about the government firing. It's not about blah blah blah blah blah. That's just looking at corporations, right? The private sector, which we should be most focused on if we're trying to predict what's going to happen in the real economy. And they're saying that they're laying off more or they're cutting jobs more than they have in the last 22 years. 22 year. That includes the GFC. That includes the surveis sickness for heaven's sakes. And when you combine all of this together, it's no surprise that yields are plummeting today. Now, it is true they were up a bit due to the ADP numbers, but this is not investing advice at all, but that was your opportunity. That was your opportunity right there because I think the market was way, way off sides. So, let's look at what the two-year Treasury is doing today. Down about seven basis points, which you guys know is a big move in the Treasury market. And um in full disclosure here before we move on, I I want to be very very clear. Uh going back to the CarMax thing, I am short this stock or I was I was I've been short CarMax for maybe two months and I had a big big big position. I had added to my position um at least once that I can remember. So, I had a big big position, short position in CarMax, uh, which I sold today. Um, so just full disclosure. And then going over to the 2-year Treasury, uh, I have a big big long position in the two-year Treasury as well. And if you guys want more kind of insider information on that, you can check out Rebel Capitalist Pro because whenever I make a change to my portfolio, which by the way is not paper trading, it's it's real money. Um I I do a trade alert in I I just did one I can show you guys. So this is the trade alert that I just did for our members based on me selling uh CarMax. But if you would have been a member of Rebel Capitals Pro, you would have known that I was buying it and and building the position to begin with. Same thing with the two-year Treasury. But Josh, go ahead and put a link in the description for people who want to check out uh Rebel Capitals Pro. But anyway, this is not about Rebel Capitals Pro. Uh, this is about the layoffs and then getting back to the 10-year Treasury. That's right. That's where I was going with it. So, we look at the 10-year Treasury. We were looking at the two-year. The 10-year is down about seven basis points today as well. And what is the 10-year Treasury really reflecting? You guys know the answer to this. It's growth and inflation expectations. That has nothing to do with supply or issuance or deficits and debt or anything like that. It's growth and inflation. So when you see the basically the 10-year Treasury trading around Fed funds, that tells you that growth in inflation expectations are really bad. Really bad. And that's why it goes down today. And obviously it's trading off of this data that we get that we got from the surveys saying that the jobs cuts or layoffs or whatever they were are the worst we've seen in 22 years. 22 years. And I think I don't even think the the 10ear is even pricing in kind of the anecdotal evidence that I think is maybe even more important with uh Chipotle and with CarMax. But uh you know again this is not I want to be very clear this is not trading advice or investing advice at all. I'm just sharing with you guys my thoughts and what I'm doing in my own portfolio. But I I think the trend is really down here in the 10-year, especially the two-year uh because it went up so much when when uh Jerome Pal gave that hawkish speech and he didn't even say that he wasn't going to raise rates, but that's the way the market perceived it. And so then you see yields going up because growth in inflation expectations increase and you know, oh no, now the Fed's not going to cut because they're worried about inflation or something like that. And then they just get the right hook from Tyson. And when we get the the challenger survey and then we get the stuff from CarMax and then they're like, "Oh, wait. We forgot." Regardless of what Jerome Pal is saying, we look at the data and the data is going straight down. The data is getting worse and worse and worse. And that's why you look at the trend here. So, let's just look at a year-to- date chart of the two-year Treasury. and that trend is down down down. So that's really the the big news. I mean, I I can't overstate how important it is that we not only get a beat on ADP and it's still bad when you would kind of step back and zoom out and then you get the uh Challenger survey worst in 22 years. And then you see Chipotle, then you see all these real economy carax down 23 24% in just one day. And so we have no crystal ball. I I'm not sitting here telling you that I can predict the future, but I can tell you that I watch the yield curve. And I can tell you that watching the yield curve has given me a huge massive edge in my own portfolio and kind of you know that's one of the big reasons why I took a long position in the two-year. It's one of the main reasons why I took a big short position in uh CarMax and then a lot of these other trades that more recently have really really gone in my favor if I if I if I wasn't so researched in the yield curve. Uh I don't know that I would have done that. I don't know that I would have done that. I It's given me a huge edge. So anyway, if you want to check out Rebel Capitals Pro, Josh put a a link in there and we'll have to keep watching this guys. I don't you know the thing is with the government shutdown, when are we going to get the non-farm payroll? Because that's the biggie. That's the biggie. And when we get it, I think there's going to be even a a bigger impact than there otherwise would have been because we've been absent the non-farm payroll for so long. So, this is something that could have a massive massive move or the market could move in a huge I mean, who knows what yields could do. They could go up or down by 20 basis points due to the next non-farm payroll. So, that's what we're really really going to have to pay attention to. All right, guys. On that bombshell, enjoy the rest of your afternoon. I'm not sure if I'll do another live stream this week because I'm traveling and in New Orleans, all those things. And so, if I don't, we'll see you next week. If I do, well, regardless, always stand up for freedom, liberty, free market, capitalism. And whenever it is, I'll see you in the next video.