The Morning Call
6/11/21
The
Market
Technical
Thursday in the
charts.
https://www.zerohedge.com/markets/bonds-bullion-bid-meme-stocks-are-monkey-hammerd
Equity and credit protection
hitting new lows.
https://www.zerohedge.com/the-market-ear/cynhnx2nbo
Fundamental
Headlines
The
Economy
US
International
The April UK trade
balance was -L0.9 billion versus -L2.0 billion in March; April industrial
production was down 1.3% versus estimates of +1.2%; April manufacturing
production was -0.3% versus +1.5%; April GDP was up 2.3% versus +2.2%.
May Chinese
vehicle sales declined 3.1% versus +8.6% in April.
May German PPI was
+1.7% versus +1.1% in April.
Other
Household net worth increased $5 trillion in
Q1.
https://www.calculatedriskblog.com/2021/06/feds-flow-of-funds-household-net-worth.html
Up to one half of
pandemic unemployment payments may have been fraudulent.
https://www.zerohedge.com/bailout/half-pandemic-unemployment-funds-may-have-been-stolen-axios
The
Fed
Druckenmiller slams Fed.
Biden’s
Plan
The positives to the G7 minimum corporate tax
proposal.
Biden cancels
Keystone XL pipeline project. This
article from a happy environmentalist. I
hope she lives in Minnesota when the fuel runs out.
https://www.nakedcapitalism.com/2021/06/keystone-xl-developer-abandons-pipeline-project.html
Inflation
This author says supply constraints are a
myth.
https://www.zerohedge.com/economics/supply-bottlenecks-excuse-inflation
The
coronavirus
Beijing’s useful idiots.
https://unherd.com/2021/06/beijings-useful-idiots/
Lockdowns will prove to be one of the most
catastrophic events in history.
Bottom line.
Inflation bets run
out of steam. I was clearly wrong yesterday
in my comments about a heightened debate about whether or not inflation will be
‘transitory’. Judging by the pin action
in both the stock and bond markets, it appears that, the reported numbers
notwithstanding, investors have for the time being concluded that inflation is
indeed transitory.
https://www.ft.com/content/cae302ad-ec5d-4398-8d0e-45fa8fc1d9a7
Hook, line and
sinker.
https://www.zerohedge.com/markets/markets-have-bought-feds-transitory-narrative-hook-line-sinker
As you know, I pay
a great deal of attention to the message from the bond market. The question in my mind is, is the bond market
discounting lower inflation or a slowing economy? As
you also know, I believe that the economy will return to a below average
secular growth rate. So, if bond investors are betting on slower growth, then I
am in agreement. However, the talking
heads are assuming that the markets’ message is that inflation will be transitory.
What if growth slows but inflation still remains high due to ‘too much money
chasing too few goods’.
My favorite
optimist believes that could be the case.
http://scottgrannis.blogspot.com/2021/06/the-good-bad-and-ugly.html
I am not presenting
this as a forecast; but I think it is the biggest risk.
What does this
mean? Well, short term at least, investors
have bought the Fed’s Kool Aid.
Inflation is transitory; so, no need to begin worrying about tapering. ‘I
can’t see an end to this uptrend as long as the money keeps flowing with
abundance and in the absence of any major negative exogenous event.’
News on Stocks in Our Portfolios
What
I am reading today
Quote of the day.
UFOs repeatedly took nuclear systems
offline.
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