Delta-Variant, Soft Data Bode Ill for Near-Term Growth
The markets waited all week for Fed Chair Powell to speak at the Kansas City Fed’s Annual Jackson Hole Symposium. Due to the Delta-variant, like many other business meetings, this one was held virtually. There was growing market concern that Powell would turn somewhat more hawkish, especially since some Regional Fed Presidents appear to have […]
The Payroll Numbers Won’t Prevent Economic Growth From Softening
Employment was the big story of the week with headline Payroll Employment rising +943K Seasonally Adjusted (SA). The consensus estimate was +870K, so, apparently, a big beat. But, looking beneath the surface reveals that this isn’t quite what, at first blush, it appears to be. Since the pandemic began, we have held the view that the Not […]
Growth Risks To The Economy Intensify
Mask mandates now are a reality in many parts of the country. That can’t be good for economic growth in Q3. The first pass at Q2 GDP came in light, with growth of +6.5% where the consensus was north of 8%. Despite that disappointment, markets seemed to like the number, even as Amazon, the poster-child company for pandemic […]
Despite Wall Street Hype, Inflation is Not Imminent
Retail sales rose a record 5.3% M/M in January after three months in a row of decline. No doubt the $600 checks from the late December “helicopter” money drop played a large role. The Atlanta Fed now says that their GDP model pegs the current quarter’s growth at +9.5% (Annual Rate (AR)). In addition, Industrial […]
Markets Are Bubbly – The Economy, Not So Much
Not a Bubble? The equity markets have been driven by momentum and speculation these past few weeks, not by underlying business fundamentals. We had GameStop, followed by Silver, then Pot stocks, and now SPACs, all driven by retail. PE ratios are in the top 1% of their historical range. Junk bond yields are at all-time-record […]
The Recovery Will Be Weaker And It Will Take Longer
While markets were slightly higher on the week (see table), there was a clear rotation back toward technology after several weeks of a lull for that sector. This is clearly shown by the week’s Nasdaq outperformance. January 22 January 15 % Change DJIA 30,997 30,814 +0.6% Nasdaq 13,543 12,999 +4.2% S&P 500 3,841 3,768 […]