with customers spending those stimulus checks hand over fist. The 0.6% gain in June came on the heels of a 1.7% drop in May. Vaccinations are driving buyers back into the stores. Electronics stores, clothing, and restaurants saw the biggest increases.
with unvaccinated states like Arkansas and Missouri driving the resurgence. Unless checked, it could lead to a broader stock market selloff in August. Los Angeles brought back the indoor mask mandate, although compliance is near zero. San Francisco may be close behind. Everyone in my company worldwide is now, with Australia last to get ones, vaccinated and I’ll be first in line for the Pfizer booster out in the fall. Delta is twice as contagious, more fatal, with more permanent side effects than earlier variants.
still the whitest hot numbers in history. 2022 is looking like 5.5%, still double the pre pandemic rate. Personally, I think these numbers are low, and the stock market thinks so too. Keep buying dips in the good names.
says Fed governor Jerome Powell in his congressional testimony, sending bonds soaring. The comment was in response to the superheated 5.4% CPI print on Tuesday. The $120 billion a month in Fed bond buying continues. Big tech loved it and continued with its non-stop rally. The rocket fuel for share prices continues unabated.
the index up a hot 1.0% in June against 0.8% in May. PPI is up 7.3% YOY. Higher commodity and labor costs against shrinking inventories were the big issues. Inflationary pressures are here, but for how long?
$4 Billion Pours into the Infrastructure ETF (PAVE),
in anticipation of big Biden budget wins, including a massive $263 million in a single day. The Global X US Infrastructure ETF is up 30% so far this year and could have much more to run. Its largest holding includes Nucor (NUE), Trane Technologies (TT), and Eaton Corp (EAT). Buy (PAVE) on dips.
Click below for their website.
as the company that seems to LIVE in purgatory. This is definitely not your father’s Boeing. Too aggressive cost-cutting to boost profit and share prices has left a heavy bill to pay. That said, there could be a good long side entry point at the 200-day moving average at $218. Buy (BA).
The Four Biggest US Banks Deliver Spectacular Earnings,
posting a combined $33 billion in profits, triggering the predictable selloff. That is $9 billion above analyst forecasts, which seem to be a permanent lagging indicator. Consumer spending is exceeding pre-pandemic levels, credit quality is soaring, and credit card spending is through the roof. Buy (JPM), (BAC), and (V) on dips.
providing great news for stocks and terrible news for bonds. No Republican support is required. This is in addition to the $579 billion infrastructure deal reach with opposition support. It’s enough dosh to keep this stock market percolating for years. Buy FANGS on dips.
on news that the US Budget deficit hit an eye-popping $2.24 trillion in the first nine months of the government’s fiscal year. That’s why the 30-year Treasury bond auction was a complete disaster yesterday, sticking dealers with a ton of unsold paper and knocking $2.00 off of the (TLT). It confirms my theory that massive issuance of government bonds would eventually crush the market. Selling short the (TLT), or buying the (TBT) could be one of the big trades for the second half of 2021.
wiping out all 2021 gains. But just try to buy some, as builders scramble for supplies. It is still up 60% YOY. Who knew wood would be a better investment than gold? Prices fell another 5.6% on Monday to $712.90 per thousand board feet on the CME. So, where is the inflation?
It’s still not out of the woods yet, as the recent 20% dive in the shares amply demonstrated. Now, they are suffering from aircraft and pilot shortages. On the other hand, running planes 100% full at higher ticket prices is both a wonderful aphrodisiac and stimulant. A year ago, they were burning a heart stopping $100 million a day, compared to gaining $1 million a day now. Avoid (AAL) for now.
from Swedish manufacturer Hearth Aerospace for short regional routes up to a 250 range. More proof of the electrification and decarbonization of the US economy. The planes will enter service in 2026. United says it will be carbon-neutral by 2050. I never thought I’d live long enough to see this one.
the biggest gain in 13 years. Excluding food and energy, it’s the biggest print since 1991. The Fed is holding its breath that these large numbers are temporary. Used car and truck prices accounted for a third of the gain for the second month in a row. That is certainly not sustainable, or I’m going into the used car business. Tech took off like a rocket on the news.
with the New York Fed’s Consumer Survey looking for 4.8% rate, an eight-year high. The Fed is still insisting that any increase is temporary. Workers see wages growing by 2.6%, while only 30.7% expect a high headline Unemployment Rate.
in a further move into cyber security, for $$500 in cash. A security upgrade for Windows and Azure is in the works. If Mr. Softy is ramping up its cyber securities holding, maybe you should too. Buy Palo Alto Networks (PANW) on dips.
An Aging Population Will Soon Drag on the US Economy,
with some 16.5% of the population, or 54 million, now 65 or older. The figure reaches 74 million by 2030. Over 85s are growing even faster. It’s about to become a big social woe since 24-hour care can run $100,000 a year.
at least for the short term. That’s because for the last year, stocks have a nasty habit of selling off after quarterly earnings reports, which are just around the corner. Announcement dates for the FANGS are below. For the short term, you want to sell days before the reports. For the long term, you want to keep them, as I expect all to double or more in the next three years.
from 9.5% a year ago to 2% now and 1% in a year. Leverage of issuers is collapsing, and earnings are soaring, causing fundamentals to improve dramatically. Junk bonds have been dragged up kicking and screaming all the way by the monster rally in the bond market, now yielding only 3.26%. That’s an awful lot of risk for very little return. Is this a giant market-topping signal for bonds? Double up you short for the (TLT).
with the banks kicking off in the coming week. JP Morgan (JPM) starts on Tuesday. These will undoubtedly be the best reports in American corporate history, coming off a 2020 pandemic bottom. It’s what happens afterwards that I’m worried about.
with wildfires in Oregon threatening to cut off long-distance transmission lines bringing in desperately needed supplies. This is while the state is facing record temperatures, 90 degrees here in Incline Village, and 132 degrees in Death Valley. I’m the hero now, sending 1,000 kilowatts/hrs a month into the grid with my 72 solar panels and six Tesla Powerwalls. Whoever heard of global warming?
with the post-Covid bounce over. It just provided $154 billion in stimulus for its economy and cut bank reserve requirements by 50 basis points. If they slow there, we could slow here, especially for big exporters to China in the ags.
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