Happy Market Update! |
I’ve started this week’s update 3 times now. Why? Politics. Specifically, the assassination attempt on Former President Trump’s life. These sort of things can have an influence on markets and financials. So, it would make sense to discuss it. As most of you know, I try to avoid culture…as best as I can…and to some extent, politics when it does not impact a financial newsletter. But………………
It is absolutely absurd that our country has fallen this far apart. And I really think there are a lot of people who just don’t care. I could spend a full newsletter just copying and pasting the irritate ramblings of people upset it ONLY Grazed his ear. Or that the media outlets refused to call it a shooting or assassination attempt. I don’t care what side of the aisle you live on…this is absolutely NOT okay. I’ve written that our country is descending into a 3rd world country, and all this attempt did was reinforce what I’ve said. Enough is enough. We need to get our collective heads out of our asses and bring this country back to what it once was. The downward spiral needs to stop. Shame on all of those people who hate Trump enough to wish he was murdered on live tv. Let us not forget…the shooter did not miss. He committed murder on live tv. That is what some people are proud of…but slightly upset he missed? Dear people who think that…I sure hope you like the heat. You are committing yourself to burn in hell. Enjoy.
Regardless of who you are voting for, this country needs a leader. There are so many headwinds around the world trying to prevent the USA from being the powerhouse it is, that we need someone who can remind them, without being cocky, that we are here and going nowhere. Otherwise we might as well just roll over…and thanks be to God…that is NOT in my wheelhouse. I don’t think it’s in your wheelhouse either.
What do some of those headwinds look like? How about we start with some inflation? From Apollo, this shows the cost of freight containers rising. Those are the goods that get shipped around the planet. This is a cost that companies must take in...and it has been clearly rising since the beginning of the year…while our CPI (consumer price index) has flattened out. My concern has been CPI (what you pay) might go back up. These costs will pass through to you. So buckle up. We are not done yet…even if the Fed says don’t worry so much about it any more (mainly because they did not hit their target of 2%). |
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Why do we as individuals feel like it…well, sucks more that they are telling us? Check out this slide I stole from our friend, @NOD008 on X. Grocery prices far exceed overall consumer prices. Well thank God we do not need groceries that often! No wonder the Fed removes this price in their overall inflation calculation. They don’t want you to know what your wallet is already telling you. |
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How are you feeling about it? Not. Too. Good. According to the University of Michigan. This consumer sentiment goes back to 2014. You can see we are nowhere near even the lows prior to covid. And we are off the recent highs from earlier this year. This is not a good sign for the economy. Yes, I expect the recession…as I believe JPow does too. |
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Here is more evidence I know how you feel. Retail sales. Forecast for June was below 0…and we where above that forecast…at 0! Woo-hoo! This is not good for the economy. |
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So Tim, the Fed will lower rates. Well, it sure looks that way now. I will not get my 0 moves in 2024. (I too like this…but think it’s not going to help inflation in the coming years.) Here is the forecast from the CME. This chart shows there is a 93.5% chance the Fed moves their Fed Funds Rate down 0.25% at the September meeting. Even I won’t bet against that. |
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So that’s good right? Costs for credit cards drop…lines of credit too! Well, yes. But…here’s NOD’s 2nd…nod… in my email. He shared this with my group last night. This shows that IF a recession occurs (and so IF one is happening now), the S&P 500 declines an average of 25% from their highs in less than 200 days. The research says that when the Fed cuts rates…recessions happen (or are happening). Or maybe this will be the one time it doesn’t happen. Are you betting against this? I might take that bet. |
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But the recession will be okay. Some of the people out there with high interest rates could use a refinance. We are here to help! The Fed fights recessions with lower rates. |
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10yr: Still moving down. Yeah! Down here means lower rates. We are moving well away from that uptrend…but still have a long way to go. But we will take it. I think the Bond market has been telling us that the economy is teetering since April…long before the Fed. |
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MBS: Moving up means lower rates. We are seeing a good move since April…but hitting some resistance with that red horizontal line I drew. We need to break through this, and we should have some room to run. |
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Tomorrow is the anniversary of my Dad’s death. He passed from years of battling Leukemia in 2009. Life is short…and I think about this a lot now that I have a 5 year old and turn 50 this year. Rumor is that I am just stubborn enough to make it another 50. But if I don’t, I need to make sure I leave something for Jackson…and I don’t mean money (although this would be good for him with his new job as City Manager of the Lego City he is building). A country that he can be proud of would be a good starting point. But I need your help. This country has a lot of work to do. So come with me. Let’s strap up our boot laces and get to work. He didn’t do anything to deserve what’s happening around him (and I keep it away from him). Who’s with me?
What does not kill you makes you stronger. |
Tim |
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