Jerome Powell and his Fed colleagues breathed a sigh of relief Friday morning as the PCE inflation report was weaker than expected. The headline PCE price index was +0.0% versus expectations of a 0.1% increase and a previous monthly change of +0.3%. The Core PCE was +0.1%, also a tenth below expectations. Recent inflation data […]
The recent Conference Board Consumer Confidence survey data show a state of cognitive dissonance among U.S. citizens. Cognitive dissonance occurs when a person believes in two contradictory things simultaneously. For instance, the latest Conference Board survey shows that expectations for increasing stock prices are among the highest since the late 1980s. However, citizens believe the […]
Japan holds $1.150 trillion of U.S. Treasury securities, well above the next major foreign holder, China, which has $770 billion. Therefore, given Japan holds 3.3% of all Treasury debt, it is worth appreciating the recent news that Japan is selling bonds. First, to dispel some fear, Nornichukin Bank, not the Bank of Japan or the […]
The unique graph below caught our attention, compelling us to read Solar Power Is Going To Be Huge by the Economist. The graph shows that solar energy will be the primary energy source for the world by 2040 under its “fast transition scenario.” The Economist article walks through some stats on the growth of solar […]
Over the last six-plus months, we have written plenty on how a few stocks lead the market higher while a large majority languishes. For example, in our latest Newsletter, Bad Breadth Keeps Getting Worse, we wrote the following: “With a market sitting at all-time highs, combined with robust money flows, the breadth of the market […]
Consumers are turning away from name-brand foods in an attempt to cut back on spending. Consumer Packaged Goods (CPG) companies such as Proctor & Gamble, General Mills, and Kellogg benefited from supply chain disruptions during the pandemic as private label products saw restricted supply. Thus, the CPG brands with more resilient supply chains used the […]
The chart below, courtesy of @KobeissiLetter on X, depicts downtown cell communication data for several major metropolitan areas as of March 2024. Cell phone activity during working hours is significantly below pre-pandemic levels in almost every major city across the country, including areas with significant population growth. The second chart below, from Macrotrends, shows Nashville’s […]
The chart below suggests that global diversification could be dead. The S&P 500 notched a total return of 13.3% annually over the past 15 years, while the MSCI EAFE and MSCI Emerging Markets indices returned 5.9% and 3.2% per annum respectively. The performance gap primarily stems from differences in earnings growth. S&P 500 earnings grew […]
Tesla investors are betting on the EV maker’s path to tech-caliber profitability. However, the manifestation of that investment thesis is still a pretty long way off, as shown by the degree to which Tesla dwarfs other mega cap valuations in the chart below, courtesy of Bloomberg. Increasing competition amid a declining consumer appetite for EV […]