Morning Briefing
July 7, 2021 | Daily JAM, Morning Briefing |
Here’s my take n market sentiment over the next three months. First, in the very short-run, for the next four weeks of earnings season, it’s hard for me to imagine that investors and traders will sell ahead of one of the biggest surges in year over year earnings growth–ever. As of June 21 Yardeni Research was projecting year over year earning growth of 64.45 for the second quarter, FactSet report that Wall Street analysts have raised their earnings by 7.3% for the second quarter during the run of the quarter–that’s the highest increase in estimates for a quarter in FactSet records. I think the odds are very high that investors will stick around for second quarter earnings reports–and on the chance of substantial earnings surprises–for the earnings season that begins with JPMorgan Chase (JPM) before the market open on July 13 and that runs, roughly, lwrt’s say until Nvidia (NVDA) reports its earnings on August 18.
July 6, 2021 | Daily JAM, Morning Briefing |
The Organization of Petroleum Exporting Countries and its affiliated oil producers (OPEC+) abandoned their Monday meeting after days of tense talks failed to result in an agreement on a tentative deal to increase production, and even over how to measure production. The disagreement between Saudi Arabia snd the United Arab Emirates was so heated that OPEC+ couldn’t even agree on a date for its next meeting. When these two countries last clashed in December 2020, the UAE talked of leaving OPEC. Oil prices initially jumped to its highest level in more than six years on news that OPEC+ had failed to agree to increase production. But prices then fell as traders speculated that the failure to reach an agreement on production increases would result in unplanned increases in production.
July 2, 2021 | Daily JAM, Morning Briefing |
The U.S. economy added 850,000 jobs in June. That was above the 720,000 jobs projected by economists surveyed by Bloomberg. The June gains continued the recovery from the shockingly low job gains of 269,000 in April. In May the economy added 583,000 jobs. But the 850,000 pace was below the 1 million rate that Federal Reserve chair Jerome Powell has touted as the pace that would prompt the Fed to begin reducing the rate of its monthly bond purchases. Which would be a step toward an initial increase in interest rates. In other words job gains hefty enough to assure investors that the economy continues its recovery from the 2020 pandemic recession, and yet not so rapid as to push the Federal Reserve into a change in monetary policy.
July 1, 2021 | Daily JAM, Morning Briefing |
Initial claims for unemployment in regular state programs fell by 51,000 to 364,000 for the week ended June26, the Labor Department reported this morning. Economists surveyed by Bloomberg were looking for 388,000 new claims. The drop to 364,000 still left initial claims above the level before the pandemic.
June 30, 2021 | Daily JAM, Morning Briefing |
Private payrolls rose more than expected in June, ADP reported this morning, with a gain of 692,000 jobs. Economists surveyed by Bloomberg were looking for a gain of 600,000 jobs. The figure was a drop from the 886,000 jobs aded by private employers in May. The biggest gains came, again, in the service sector.
June 29, 2021 | C, Daily JAM, KBWB, Morning Briefing, USB |
That didn’t take long. On Thursday the Federal Reserve reported that all 23 big banks tested in its annual stress test, passed. Which means that the last remaining restrictions on dividend increases and share buybacks are now history. Yesterday big banks started to announce dividend increases
June 28, 2021 | Daily JAM, Morning Briefing |
Watch for the Friday morning release of the June employment numbers by the Bureau of Labor Statistics. Economists surveyed by Bloomberg are expecting a rebound from a weak May report to 700,000 net jobs added in June. May was a surprisingly weak 559,000 new jobs. Economists expect to see the official unemployment rate dip to 5.6% from 5.8% in May.
June 25, 2021 | Daily JAM, Morning Briefing |
The Personal Consumption Expenditures index, the Federal Reserve’s preferred inflation measure rose 0.4% in May to an increase of 3.9% from May 2020. The core rate, which excludes food and energy prices, climbed at a 3.4% rate from May 2020. That was the highest annual rate since 1991.
June 24, 2021 | Daily JAM, Morning Briefing |
The job market is improving, but the rate of improvement is tantalizingly slow. New weekly jobless claims in regular state unemployment programs fell for the week ended on June 19 to 411,000. Economists had expected a drop to 380,000. The prior week saw a (revised) 418,000 new claims.
June 23, 2021 | Daily JAM, Morning Briefing, Short Term |
I think the market reaction to this news is actually more important than the news itself. Today, June 23, we’re looking at yet another example of stocks shaking off bad economic news. Sales of new U.S. homes dropped unexpectedly in May with purchases of new single-family homes dropping 5.9% to an annualized 769,000 rate. In addition revisions lowered the annualized rate for April to 817,000. Economists surveyed by Bloomberghad expected an increase t a 865,000 annualized rate in May.
June 21, 2021 | Daily JAM, Morning Briefing |
Remember way back at the beginning of last week? That is before the Federal Reserve signaled on Wednesday that more of the members of its Open Market Committee were thinking about raising interest rates sooner than previously expected. Re-opening stocks, value stocks, and cyclical stocks led the market. The small cap Russell 2000 was the best performing of the major indexes. Well, they’re back
June 18, 2021 | Daily JAM, Morning Briefing |
Yesterday, growth stocks climbed in the face of signals from the Federal Reserve on Wednesday that interest rates increase were coming sooner–as soon as the end of 2022–than expected. That seemed puzzling. May be, one line of thought (mine) had it, investors and traders decided that growth stocks would outrun any increase in interest rates that might take place in 2022 or 2023. Today, we got the selling that many had expected yesterday
