70 Words
Aug
03

Indestructible Inflation

The Fed’s favorite inflation measure, the personal consumption expenditure index, increased 6.8% Y-o-Y in June, up from 6.3% Y-o-Y in May, and its highest reading since 1/82! Moreover, the employment-cost index, a measure of wages and benefits for civilian workers, grew by 1.3% in 22Q2, down … [Read more...]

Aug
03

Bifurcated Business

At LVMH, the world’s largest luxury group, whose brands include Christian Dior, Louis Vuitton, Tiffany, and others, reported a 28% Y-o-Y sales increase, and at Hermes, home of the $20,000 Birkin bag, sales are up 23% Y-o-Y. Conversely, McDonald’s is seeing lower-income customers buy more value … [Read more...]

Aug
01

Recession Rumblings

After contracting at an annualized rate of 1.6% in 22Q1, GDP again shrank in 22Q2 by 0.9%. The reason; inventories reduced 22Q2 GDP by 2.01 points. Similarly, net exports boosted GDP by 1.43 points after reducing it by 3.23 points in 22Q1. These extraordinarily large swings are due to covid-induced … [Read more...]

Jul
29

Baseball Baseline

The Friday File: Batting average predicts 67% of the runs a team scores. On-base percentage, the frequency with which a player reaches base/at-bat, predicts 78%. On-base percentage plus slugging percentage (OPS), the sum of the on-base percentage and the average number of bases gained per at-bat (a … [Read more...]

Jul
28

Petroleum Powerhouses

The big supermajor oil companies collectively produce about 15% of the world’s oil, with Exxon the biggest and producing almost four million bbl/day. Conversely, national oil companies produce almost 60% of the world’s crude, with Saudi Aramco at 12 million bbl/day and Gazprom at 10 million bbl/day … [Read more...]

Jul
27

Inverse Interest

The pool of negative-yielding corporate and sovereign debt is down from a peak of $18.4 trillion on 12/11/20 to $2.4 trillion on 7/22/22, but up from $1.93 trillion on 6/17/22, a level first surpassed in 1/15 when the ECB and BoJ pushed rates negative to boost growth and inflation. Pre-Covid-19, … [Read more...]

Jul
26

Investor Increment

Investor home purchases peaked at 27.6% of sales in 22Q1, up from 24.8% in 21Q4 and 19.2% in 21Q1, the first quarter of elevated investor purchases. In 2019, investor purchases averaged 16%/quarter. Numerically, investor purchases rose from 200,000/quarter in 2019, peaked at 416,000 in 21Q3, then … [Read more...]

Jul
25

Massive Multifamily

June single-family housing starts fell 8.1% M-o-M and 15.7% Y-o-Y, while single-family permits declined 8% M-o-M and 11.4% Y-o-Y as they return to pre-covid levels. Conversely, multifamily starts are up 10.3% M-o-M and 15.6% Y-o-Y, while multifamily permits are up 11.5% M-o-M and 26% Y-o-Y. This is … [Read more...]

Jul
22

Costly Cru

The Friday File: Very recently, a bottle of champagne sold for $2.5 million, probably obliterating the record for the costliest bottle containing alcohol ever sold. Why so much? It has five NFTs of cartoon characters on the bottle. Apparently, the combo of Premier Cru grapes (not the best) and the … [Read more...]

Jul
21

Mighty Midterms

Since at least 1950, the year following US midterm elections has always seen the S&P 500 rise. During this 70-year period there have been 10 elections with a Republican president, and eight with a Democratic one. The best year for equities was 1955 (Eisenhower) when they gained about 30%, while … [Read more...]