The Morning Call--Inflation surprises the highest on record

 

The Morning Call

 

5/28/21

 

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/small-caps-jump-big-tech-dumps-bidens-budget-busts-bonds

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          April pending homes sales fell 4.4% versus expectations of +0.8%.

                          https://www.advisorperspectives.com/dshort/updates/2021/05/27/pending-home-sales-drop-4-4-in-april

 

April personal income fell 13.1% versus projections of -14.1%; personal spending was up 0.5%, in line.

https://www.zerohedge.com/economics/feds-favorite-inflation-indicator-explodes-fastest-rate-1992-incomes-crash-record

 

The April PCE index was up 0.6%, in line; the core PCE index was up 0.7%, also in line.

 

 

The May Kansas City Fed manufacturing index came in at 32 versus 40 reported in April.

                          https://www.advisorperspectives.com/dshort/updates/2021/05/27/kansas-city-fed-survey-continued-expansion-in-may

 

                        International

 

May EU consumer confidence declined 5.1%, in line; the economic sentiment index was 114.5 versus 112.1; industrial sentiment index was 11.5 versus 11.3; the services sentiment index was 11.3 versus 6.5.

 

                        Other

 

              Average new home sales price reaches record high.

              https://politicalcalculations.blogspot.com/2021/05/average-new-home-sale-prices-in-us.html#.YK_Ko6hKiUk

 

              The era of engagement with China is over.

  https://www.bloomberg.com/news/articles/2021-05-26/biden-s-asia-czar-says-era-of-engagement-with-xi-s-china-is-over?srnd=premium&sref=loFkkPMQ

 

The Fed

 

  When will the Fed is your friend end?

  https://www.ft.com/content/9f9d00da-afb1-4b51-9a0f-6344df914bd8

 

 

Fiscal Policy

 

  What is there is a debt crisis?

  https://www.realclearmarkets.com/articles/2021/05/27/some_day_there_may_be_a_debt_crisis_so_sell_federal_assets_now_778667.html

 

  The latest madness: QE = savings.

  https://www.zerohedge.com/markets/latest-mmt-madness-qe-savings-really

 

Biden’s Plan

 

  Biden’s new budget proposal includes retroactive capital gains taxes.

  https://www.zerohedge.com/markets/stocks-snap-lower-biden-budget-suggests-retroactive-capital-gains-tax-hike

 

            Inflation

 

              Summers warns Biden.

              https://www.cnn.com/2021/05/26/economy/inflation-larry-summers-biden-fed/index.html

 

                  Inflation surprises the highest on record.

              https://www.zerohedge.com/markets/us-inflation-surprises-are-highest-record

 

 

     Bottom line.

 

            Do low interest rates justify high valuations?

            https://compoundadvisors.com/2021/do-low-interest-rates-justify-high-valuations

 

            Two profit measures with much different results.

            https://www.zerohedge.com/markets/two-profit-measures-two-different-stories-gdp-profits-are-unchanged-while-sp-profits-soar

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            Sometimes the ignorance is just stunning.

            https://www.adamsmith.org/blog/sometimes-the-ignorance-is-just-stunning

           

Friday morning humor.

            https://twitchy.com/samj-3930/2021/05/24/best-social-media-analogy-ever-ricky-gervais-sums-up-twitter-in-a-perfectly-hilarious-and-sorta-painful-bit-watch/

 

            The spacefaring paradox.      

            https://slate.com/technology/2021/05/spacex-starship-space-travel-paradox.html

           

 

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