The Morning Call--Are bonds telling us the H2 economy won't be as strong as many believe?

 

The Morning Call

 

7/8/21

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/bonds-bitcoin-big-tech-bid-small-caps-continue-slide

 

Bonds have spike hard the last two days, suggesting that fixed income investors may be realizing that the post Covid recovery is in the rear view mirror.  Will equity investors be far behind?

           

            In bonds there is truth.

            https://www.zerohedge.com/markets/bonds-there-truth-importance-134

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

The May job openings (JOLTS) report showed 9.2 million available jobs    versus estimates of 9.4 million.

 

                        International

 

The May German trade balance was +E12.3 billion versus +E15.2 billion recorded in April.

 

                        Other

 

            The Fed

 

The minutes from the latest FOMC meeting were released yesterday.  The link below provides a thorough analysis of the statement.  But to summarize (1) the economy still has a ways to go before ‘tapering’ occurs, (2) the risk of inflation is rising and (3) the likelihood of ‘tapering’ sooner rather than later has increased.

              https://www.zerohedge.com/economics/fomc-minutes-show-fed-ready-taper-earlier-anticipated

 

The ECB met this morning, following in the Fed’s footsteps plus upping the ante, adding climate change to its mandate.

              https://www.zerohedge.com/markets/ecb-launches-average-inflation-targeting-will-tackle-climate-change

 

               

            Inflation

 

              IMF sees risk of sustained rise in inflation in US.

              https://www.reuters.com/business/imf-chief-sees-risk-sustained-rise-us-inflation-2021-07-07/

 

              Risks on growth and inflation have shifted from too little to too much.

              https://www.zerohedge.com/markets/2021actual-outcome-scorecard-risks-growth-and-inflation-have-shifted-too-little-too-much

 

     Bottom line.

 

            The power of rebalancing a portfolio.

            https://blog.validea.com/the-most-ignored-investing-premium/

 

            More on valuation.

            https://www.advisorperspectives.com/dshort/updates/2021/07/07/p-e10-is-the-stock-market-cheap

 

                A must read analysis of what is wrong with ‘capitalism’ today.

            https://realinvestmentadvice.com/macroview-capitalism-does-not-equal-corporatism-pt-1/

 

 

    News on Stocks in Our Portfolios

 

MSC Industrial Direct (NYSE:MSM): Q3 Non-GAAP EPS of $1.42 beats by $0.03; GAAP EPS of $1.68 beats by $0.32.

Revenue of $866.29M (+3.8% Y/Y) beats by $17.68M.

 

CVS Health (NYSE:CVS) declares $0.50/share quarterly dividend, in line with previous.

 

What I am reading today

 

            Morgan Housel’s money rules.

            https://www.collaborativefund.com/blog/$/

 

            Wishful thinking about the search for alien life.

            https://www.vox.com/future-perfect/22556083/ufo-uap-report-fermi-paradox-aliens

 

 

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