05-MAY 12-2022

Today's ChartGood morning.
The good news?  Inflation has slightly slowed on a year-over-year basis, for the first time in seven months.  The bad news?  It’s still high at 8.3 percent.  And it came in higher than expectations.
Looking at the data shows some reasons for the unexpected strength.  Most components of CPI still rose more than 6 percent in April.  But soaring food prices – which we’ve warned about fairly often — were a big contributor.  Another big move higher was record airfare prices, as high fuel costs and a reopened economy drove prices up.
The data doesn’t give too much of a hint for next month’s changes, although energy prices are starting to drop down a bit more that we could see a further decline in inflation rates.  If that’s the case, the Federal Reserve may slow down on its market-killing rate of interest rate hikes… but that’s still a month away.  Continue to stay cautious.

Now here’s the rest of the news:

Biggest Treasury Buyer Outside U.S. Quietly Selling Billions
In times of Treasury turmoil, the biggest investor outside America has historically lent a helping hand.  Not this time.  Japanese institutional managers – known for their legendary U.S. debt buying sprees in recent decades – are now fueling the… [Read Here]

Gasoline Prices Take Another Turn For The Worst
The average price of all grades of gasoline spiked to a record on Monday, May 9, the third week in a row of increases. And according to the US Department of Energy, the average price was up 46% from a year ago, edging past the prior record of… [Read Here]

May 12, 2021

Conflict of InterestGood morning.
With a record 8.1 million job openings, it’s clear that businesses need labor.  But right now, labor has a system to game.  We’ve already seen that an extra $300 per week of federal unemployment on top of state unemployment can make for $600 or more per week.  Over a 40 hour workweek, the math says that’s $15 per hour.  With most minimum wages below that nationally, it’s clear to see that not working is what pays best right now for many low-skilled workers.
President Biden has weighed in on the matter, downplaying the effect the extra unemployment benefits are causing.  He’s also stated that anyone who has a suitable job offer needs to get back to work. Without defining the word “suitable,” however, it’s clear that the system can still be gamed.  Expect the labor market to remain out of whack as long as extended benefits remain available.

Now here’s the rest of the news:

The Jobs Picture Is More Complex Than It Seems –Bruce Yandle, Reason
Expectations for April: 1 million new jobs.  Those hopes were crushed when the BLS reported just 266,000 jobs created.  Here’s why that’s not quite as bad as it looks… [Read Here]

May 12, 2020

Who wants the talking stickGood morning.
It certainly appears that the market is looking to find new leadership but is failing to do so.  How much can tech and healthcare drag the market higher w/o greater participation?
Not that the internals were terrible today, but the Nasdaq 100 that closed nearly 1% higher had more declining stocks than advancing stocks and more declining volume.

Now here’s the rest of the news:

Fed’s New QE Operations Could Be “Last Stop” Before a Deep Recession
With each action they take to save the economy today, could it be creating more problems for tomorrow?  Here’s what could be in store for Americans. [Read Here]

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05-MAY 15-2022

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05-MAY 14-2022

Today! May 14, 2021 Good morning. One year ago, oil prices went negative as traders feared that the pandemic would lead to prolonged drops in oil use and got caught in trades they couldn’t get out of.  Today, oil and gasoline prices have held up well in inventory reports.  However, supply issues remain in the South and up and down the East Coast, even as Colonial pipeline paid a $5 million ransom to the hackers who shut down their system.  A number of states have declared emergencies as supplies have run low. It just goes to show that oil, one

05-MAY 13-2022

Good morning. Meme stocks are back!  Well, sort of. A spike in companies like AMC Entertainment (AMC) and GameStop (GME) occurred yesterday.  GameStop was even halted multiple times on the way up (but not on the way down).  Oddly, this may be an early sign that markets are looking for a short-term bottom, given the sharp reversals higher. On CNBC, analyst Jim Cramer came out against the traders of meme stocks using sites like Reddit’s Wall Street Bets, to find the meme stock opportunities in the first place.  Tough words for someone whose television show features sound effects.  But for

05-MAY 11-2022

Good morning. Typically, growth stocks lead the market.  That’s because these companies have the ability to scale up rapidly, and one of the best signs of a stock heading higher over the long haul is increased earnings. Yet every few years, value stocks have their time to shine.  A year ago, Warren Buffett’s performance as being derided.  Yet he’s buying stocks now.  In contrast, Ark Innovation, the hypergrowth fund managed by Cathie Wood, is now not just down relative to Buffett — but it’s underperforming the S&P 500 since its inception. Can these trends reverse in time?  Yes.  Will they

05-MAY 10-2022

Good morning. Any econ 101 student can tell you that there’s a lag effect between something like, say, the creation of trillions of dollars in spending, and inflation rates reflecting that.  We’re seeing that trend play out today, with the highest inflation levels in decades. The good news?  Some of that new money first went to financial markets, rather than in goods and services.  That helped keep many things affordable, especially during the initial lockdown phase of the pandemic.  But today, we’re seeing the impacts of those past lockdowns (and current ones).  And we’re seeing that handing out money directly

05-MAY 09-2022

Good morning. People don’t mind inflation when it hits things like assets.  When stocks and home prices are rising, consumers feel wealthier.  This “wealth effect” tends to be beneficial to spending, which then become a self-fulfilling prophecy. The 2009-2020 market rally started with this effect.  The bank bailouts propped up the banks, but didn’t cause inflation on Main Street.  Today, thanks to the stimulus measures during the pandemic, Main Street went on a spending binge.  That’s caused a reverse wealth effect as the prices of goods like food and utilities are rising at a rapid rate — but now asset

05-MAY 08-2022

What is though-to-be, somewhere in Newfoundland and/or Labrador! An aerial view of a small town on a rocky Atlantic coastline… May 08, 2021 6 Surefire Ways to Beat Stress In a recent newsletter, we shared some of our favorite foods that can help ease stress.  While nutrition is an important soldier in the battle against excessive chronic stress, it’s just one piece of the puzzle.  The great news is that there are numerous lifestyle variables and tactics that you can use to help manage stress. Sure, stress management can be tricky, but that’s exactly why want to share several of our favorite, surefire ways to promote resilience and stress resistance.

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