Fed faces inflation “disaster” as data show signs that inflation expectations are becoming embedded
The latest Consumer Expectations survey (that is for May) from the New York Federal Reserve shows U.S. households’ anticipate inflation will rise at a 6.6% annual rate over the next year. That’s up from April expectations for a 6.3% rate. The May...
Watch my new YouTube Video: Quick Pick Truist Financial
My one-hundred-and-forty-third YouTube video “Quick Pick Truist Financial” went up today. My Quick Pick this week is Truist Financial Corp (TFC), a “super-regional” bank based in the Southeast. Bank stocks have been down recently on rising...
Stocks plunge as May CPI inflation rises to 8.6%
Headline Consumer Price Index inflation in May rose to a new annual high rate of 8.6% in May, the Bureau of Labor Statistics reported today, June 10. Headline prices rose 1% from April. The big drivers were, as expected, food (with prices up at a 10.1% annual rate)...
Please Watch My New You Tube Video: “The Treasury Yield Tide Is Rising”
My one-hundred-and-forty-second YouTube video “The Treasury Yield Tide Is Rising” went up today. Yields are up for 2-, 5-, and 10-year Treasuries. I’m also seeing higher expectations for more rate increases in the coming Fed meetings with the odds...
Taiwan Semiconductor raises revenue forecast–China worry not priced in so far
Taiwan Semiconductor Manufacturing (TSM), the world’s largest independent chip producer, expects revenue to grow about 30% in 2022. Sales growth this year should accelerate from 2021’s 24.9% (in dollar terms), Chairman Mark Liu said at the company’s annual...
Another day, another downgrade for global economic growth
On Wednesday, June 8, the Organization for Economic Cooperation and Development warned that Russia’s invasion of Ukraine is fueling rapid inflation and slowing global growth. (The OECD represents 38 countries including most of the world’s advanced economies.) “We are...
Target outlook cut says some retailers have an inventory problem
Target (TGT) cut its profit outlook for the second time in three weeks. The company will attack oaring inventories in discretionary categories such as home furnishings with price mark downs, cancelling orders from vendors, and “off-loading excess inventory. (To...
Fertilizer demand looks to fall as North American farmers plant less in reaction to higher prices
Logic says that demand for fertilizer should be soaring as North American farmers look to increase production at a time when grain prices are near record highs thanks to the severe reduction in exports from the Ukraine and Russia. Logic, however, looks to be wrong. An...
Please watch my new YouTube video: Trend of the Week Danger of a Lithium Drought
My one-hundredth-and-forty-first YouTube video “Trend of the Week: Danger of a Lithium Drought” went up today. My Trend of the Week video looks at the effects of Chile’s 15-year drought on global lithium production and prices. In particular, I look...
Wall Street analysts cut earnings estimates for Q2–how significant is that?
As of June 3, FactSet reports, analysts had cut their earnings estimates during the first two months of the quarter for second quarter earnings by companies in the Standard & Poor’s 500 by 1.3% to $55.36 from $56.06. How significant is that? And what does...
Please watch my new YouTube video: Quick Picks Wyndham Hotels
My one-hundredth-and-fortieth YouTube video “Quick Pick Wyndham Hotels” went up today. My Quick Pick this week is Wyndham Hotels (WH), which owns a large portion (40%) of the U.S. market in branded economy and midscale hotels. This is gearing up to be a...
May jobs comes in stronger than expected; that should put the kibosh on thoughts of a Fed pause in September
The U.S. economy added 390,000 jobs in May, the Labor Department reported this morning. Economists had expected the economy to add 318.000 jobs for the month. In April the economy added a revised 436,000 jobs. The unemployment rate stayed steady at 3.6%. Economists...
Please watch my new YouTube video: Beware the Dot Plot
My one-hundredth-and-thirty-ninth YouTube video “Beware the Dot Plot” went up today. The next Fed meeting is June 15, and I think there isn’t much to worry about in terms of a coming rate increase (we know it will be 50 basis points, which the market...
Listen carefully–the Fed says, again, expect a 50 basis point increase in June and July and no September pause
Another Federal Reserve official talked the interest rate increase talk today. Federal Reserve Vice Chair Lael Brainard told CNBC that expectations for half-percentage-point increases in interest rates this month and next were reasonable, and that she saw no case for...
In new forecast Delta Airlines projects rebound in Q2 sales to 2019 level, but higher than anticipated costs
So far it’s unanimous: On Wednesday, June 1, Delta Air Lines (DAL) joined United Airlines (UAL) and Southwest (LUV) in projecting rising demand in the second quarter, higher fuel costs, and staffing shortages severe enough to lead to cuts in flights. Delta said...
Oil prices now a battle between restored demand from China and more production from OPEC
Oil prices went a strong NOWHERE today, June 1, as the oil market struggled with news of the end of lockdowns in China, which would lead to higher demand, and speculation that OPEC would act to increase production. U.S. benchmark West Texas Intermediate closed up...
Watch my new YouTube video: Trend of the Week Housing market cools
My one-hundredth-and-thirty-eighth YouTube video “Trend of the Week:Housing market cools” went up today. We’re seeing some of the first effects of the Fed’s increase in interest rates in the cooling of the housing market. In Austin, for...
EU agrees to partial ban–66%–of Russian oil imports
The European Union has finally found a way to agree on a partial ban on oil imports from Russia. The group has agreed to an immediate ban on imports arriving by sea. That covers about two-thirds of Russian imports. To get Hungary’s vote for the partial ban, the...
So does the Fed want the stock decline to continue? First Fed speaker of the week emphasizes 50-basis-point interest rate hikes
Federal Reserve Governor Christopher Waller said today, May 30, that he wants to keep raising interest rates in half-percentage point steps until inflation is easing back toward the central bank’s goal of 2%. “I support tightening policy by another 50 basis points for...
This week will be a test of the new theory that the Fed is okay with a stock market decline and that the Powell Put is dead
I’m looking for a test this week of the new “Fed Call” theory. A few weeks ago, before last week’s rally anyway, the theory starting going around that the “Fed Put” (sometimes called the “Powell Put”) was dead. The Fed...
Please watch my new YouTube video: We’re headed to a recession…if the Fed is serious about fighting inflation
My one-hundredth-and-thirty-seventh YouTube video “We’re headed to a recession…if the Fed is serious about fighting inflation” went up today. Please watch and subscribe to my YouTube channel. And like my video. Here’s the...
The Fed will engineer a recession–more details not in the video
In today’s YouTube video I argue that the Federal Reserve will have engineer a recession if it is serious about bringing inflation under control. This post gets more into the specific details of why I think that’s true than the video does. (I suggest...
This is the kind of bear market rally that tries portfolio discipline
On Tuesday, Snap (SNAP) fell 43.08% as the company lowered guidance for the remainder of 2022. On Thursday, the shares were just 4.59%. At today’s close of $14.81 they’re still trading well below the 50-day moving average of $29.86. Should you chase them...
Please watch my new YouTube video: Quick Pick WEAT
My one-hundredth-and-thirty-sixth YouTube video “Quick Pick WEAT” went up today. I’m continuing my recent focus on wheat prices as they continue to rise. Higher wheat prices are the result of a perfect storm: the ongoing war in Ukraine, a blockade of...
Fed’s minutes from May meeting reassure markets; everybody is on the same page on interest rates
Minutes from the Federal Reserve’s May 4 meeting shows central bank officials in agreement on the ned for 50-basis-point interest rate increases at the June and July meetings. And then, the minutes say, the Fed would respond to developments in the economy either...
Snap shocks market, plunges 43%, closes below 2017 IPO price
Snap (SNAP), the online company best known for its SnapChat platform, closed down 43.08% today, May 24. On April 21 when the company released its first quarter earnings report, the company had forecast second quarter revenue growth of 20% to 25%. That was already...
We’re a long way from a capitulation
Looking for the bottom on this plunge or bear market (true bear in the NASDAQ and near bear market in the Standard & Poor’s 500)? Despite the pain we’re all feeling in our portfolios, I think we’ve got a way to go. I base that conclusion on both...
Watch Nvidia’s earnings report Wednesday for an indicator of odds of a summer rally
The most important indicator of market direction and sentiment this week will be Nvidia’s (NVDA) earnings report for the quarter that ended in April on Wednesday, May 25. Wall Street analysts and expect earnings of $1.09 a share. (That’s the consensus. The...
Palo Alto Networks beats, raised guidance again, gains 10.7% in after-hours trading
I’m actually surprised that shares of cyber-security company Palo Alto Networks (PANW) rose only 10.7% in after-hours trading after the company reported adjusted fiscal third quarter earnings of $1.79 a share. That was ahead of the adjusted earnings of $1.68 a...Jim’s Daily Email Alerts:
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