Last week was painful until the Personal Consumption Expenditure report indicated that inflation was essentially under control.
The core rate - excluding food and energy - only increased .2% to an annual rate of 2.6% close to the Fed target.
This sent speculation soaring that the Fed will lower rates in September.
The political side found VP Kamala Harris taking over the reins of the Democratic Party as its candidate to run for the Presidency this fall. In Israel, there were missile attacks by Hezbolla extremists killing 12 civilians.
We look forward to the earnings reports from Facebook, Amazon, Apple and Microsoft this week. You would think you could kick back and read a good book.
But no, no, no.
One of the big positives of late has been the recovery of Bitcoin on the back of Trump apparently being in favor of having Bitcoin be kind of reserve or standard.
That and this issue of new ETGs has brought the crypto back up to $70,000.
All the turmoil in the world has not been lost on gold as it continues to set record highs as a hedge against inflation and unrest politically.
One sector punished last week was the auto sector.
Earnings were poor at best.
It seems the appetite for new cars and trucks has waned a bit, if not significantly.
You might think that is due to EVs, but Tesla saw sales drop significantly.
Even the sale of the flagship Ford F150 was under pressure.
In the transportation sector, Boeing got a boost from announcing orders at a recent air show, though we will have to see if they can deliver.
One of Boeing’s ongoing problems has been an inability to deliver the orders it has in place currently.
What I am interested in watching is the taste for investors to move back into the Magnificent 7 after the recent fallback in value.
Since August of last year, we’ve had setbacks that were quickly erased.
The speculation of a Fed cut may bring some of cash sitting on the sidelines back into equities.
It, however, may cause corporations to issue debt and that cash will move from Treasuries, earning less than 5% to corporates earning more than 6%.
We could hardly have any more distractions for this market that it can handle.
We do have the Olympics to draw attention away from politics and worldwide conflict.
Some just got tired of the whole thing.
Maybe they all will go on vacation and check out for a while.
Not sure all the analysis and consternation has produced anything more than a constant stream of misinformation.
I will spend the week with yard work that I put off for various reasons and have no justification in the least.
The problem is that I can begin this and probably never get through.
That is the problem with procrastination, there is always a point where reality trumps rationalization.
A wiser man would just hire someone to take care of the matters at hand.
I am not the poster child for that kind of logic.
Getting started is the real problem.
I am much like the Fed.
They know they need to get started, but find all sorts of reasons to wait.
I also know that nothing has to be done on any certain date.
That is not to say it never gets done, but that it can be accomplished almost at any time.
The worst part about procrastination is that far too often you find that it didn’t really have to be done at all.
That is the Fed’s real problem in that we have done just fine in spite of all the speculation about the terrible consequences of high rates.
They remember that they also saw inflation as transitory and it did not move quickly enough over a year ago.
Contrary to those who pontificate as if they know, no one really knows.
That is the real deal.
