The consumer is getting stretched: credit card debt rises by $46 billion in the second quarter

The consumer is getting stretched: credit card debt rises by $46 billion in the second quarter

Credit card debt rose in the United States from April through June by $46 billion, a 5.5% increase over the first quarter, as Americans borrowed billions of dollars to continue spending, according to a report on Tuesday, August 2, from the Federal Reserve Bank of New York. The increase of 13% from the second quarter of 2021 to the second quarter of 2022 was the biggest jump in more than 20 years.

Another crack in the jobs market

Another crack in the jobs market

Job openings in the United States fell in June to a nine-month low. The number of available positions decreased to 10.7 million in the month from an upwardly revised 11.3 million in May, the Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS, showed Tuesday. The 605,000 decline was the biggest since April 2020. I’m sure this data has caught the Federal Reserve’s eye.

Please watch my new YouTube video: Earnings Not as Bad as They Could Be

Please watch my new YouTube video: Earnings Not as Bad as They Could Be

My one-hundred-and-sixty-second YouTube video “Earnings Not as Bad as They Could Be” went up today. Microsoft (MSFT) serves as my example. We’re seeing some companies that, despite very meager earnings growth, give investors the impression that things “are not as bad as they could be.” These stocks will see bumps after upcoming earnings reports. Is this a long-term trend? Is it enough to keep the Bear Market rally going? Not necessarily. But it supports stocks for now.

What to sell in a Bear Market rally–and two sells for Monday, Omnicom and Alcoa

What to sell in a Bear Market rally–and two sells for Monday, Omnicom and Alcoa

I ended my recent post “This looks like the Bear Market rally I’ve been waiting for” on my subscription JubakAM.com site by saying “Enjoy the ride but look to sell shares of companies that look most exposed to the return of recession/high interest rates/inflation worries. That post had been up for all of 18 minutes before I got the perfectly reasonable question “Like what?” And I promised an answer so here are my preliminary thoughts on what I’d look to sell in a Bear Market rally

U.S. and global manufacturing slowed in July

U.S. and global manufacturing slowed in July

U.S. factory activity fell to 52.8 in July, according to the Institute for Supply Management’s manufacturing survey. That’s the lowest level on this index since June 2020 and it’s a slight dip from 53 in June. In this index anything above 50 indicates expansion and anything below 50 indicates contraction. A decline in new orders seems to be behind the dip.

Trick or Trend: Watch bonds for a clue on how long this Bear Market Rlly will run

Trick or Trend: Watch bonds for a clue on how long this Bear Market Rlly will run

The yield on the 10-year Treasury has dropped a whopping 36 basis points in the last month to just 2.65%.

That’s either a strong vote that the economy is about to move into a deeper recession or that the Federal Reserve won’t raise interest rates by as much as had been anticipated earlier in the year. Or maybe a vote for both. But that drop in yield (with a rise in Treasury prices) has certainly added a bit of fuel to the current Bear Market rally. And if you’re trying to figure out how long that rally might last, I suggest you add the direction of Treasury yields to your list of indicators to watch.

Inflation, wage numbers today are bad news for “soft landing” believers

Inflation, wage numbers today are bad news for “soft landing” believers

Inflation, measured by the Federal Reserve’s preferred Personal Consumption Expenditures index climbed 6.8% in the twelve months that ended in June. That’s the fastest rate of growth since 1982. Core PCE inflation (that is after removing food and energy costs) rose 4.8%. The core rate was slightly above the 4.7% expected by economists surveyed by Bloomberg. In other data today wages climbed at a robust clip, although not a high enough gain to keep up with inflation.

This looks like the Bear Market rally I’ve been waiting for

This looks like the Bear Market rally I’ve been waiting for

After looking like it was over earlier in the week with a significant pull back on Tuesday, July 26, stocks have rallied in the last two days, gaining 3.85% by the Thursday, July 28 close from that Tuesday low. And right now all the ducks are lined up in a row for a strong move higher. (But you know what they say about Bear Market rallies right? They’re really hard to trade and they’re even harder to sell into.)
Those ducks?

Please Watch My New YouTube Video: Quick Pick First Majestic Silver

Please Watch My New YouTube Video: Quick Pick First Majestic Silver

My one-hundred-and-sixty-first YouTube video “Quick Pick First Majestic Silver” went up today. This hasn’t been a great year for precious metals hedges. However, allow me to make the case for First Majestic Silver (AG), given the coming recession and my expectations for the Fed’s schedule of rate increases. A hedge for 2023? At the current price, it’s an attractive bit of insurance against a big surge in risk.

I’m selling Chipotle Mexican Grill out of my Jubak Picks Portfolio

I’m selling Chipotle Mexican Grill out of my Jubak Picks Portfolio

In yesterday’s YouTube video I explained that a recession works by peeling the sock market onion. With each step down in the economy, more stocks report negative surprises or issue negative guidance. Investors and traders sell those stocks–Snap (SNAP) for example fell 39% in the day–and buy the shares of companies that have, for the moment, shown the ability to dodge the economic bullet. (So Alphabet (GOOG) climbs 6.47% when it reports that advertising revenue hasn’t dipped as much as the Snap results threatened. But I pointed out, each time the recession peels away a layer of the stock market onion, it leaves fewer and fewer stocks on the “safe buy” side. And if the recession gets deep enough, many of these safe buys will wind up showing the same problems as earlier hit their sector peers. So tomorrow, Friday, July 29, I’ll be selling shares of Chipotle Mexican Grill (CMG) out of my Jubak Picks Portfolio.