Data, data everywhere in the next two days. From inflation to GDP. To begin with the Bureau of Economic Analysis is scheduled to report first quarter U.S. GDP growth on April 28. Economists expect to see that the economy has grown at an annualized rate of just 1.1% in the quarter. That would be a huge drop from the 6.9% rate in the fourth quarter of 2021. But they warn that the headline number will be extremely misleading.
Neither company crushed Wall Street earnings expectations, but both reported good enough news in a very tough environment. I own PepsiCo in my long-term 50 Stocks Portfolio, where it was up 220.4% from my initial December 30, 2008 pick as of the close on April 26. I will add the stock to my 12-18 month Jubak Picks Portfolio tomorrow, April 27, with a target price of $190 a share. The stock pays a 2.47% dividend I own shares of Coca-Cola in my Jubak Picks Portfolio, where it was up 29.8% from my February 19, 2021 pick, and in my Dividend Portfolio, where it was up 41.75% from my May 1, 2020 pick. Tomorrow, April 27, I will add shares of Coca-Cola to my long-term 50 Stocks Portfolio. In addition I will raise the target price on Coca-Cola in my Jubak Picks Portfolio to $78 from the current $56 a share.
The International Monetary Fund cut its forecast for global economic growth in today’s regular update of its World Economic Outlook. The IMF is now projecting global economic growth of 3.6% in 2022. That’s down from a forecast of 4.4% growth in January before Russia invaded Ukraine. And the forecast is well below actual growth of 6.1% in 2021. The IMF also lowered its forecast to 2023 to 3.6% from the prior 3.8% growth.
I’m looking for more downgrades on projections for global economic growth as war in Ukraine gets hotter again with shift in fighting to eastern Ukraine. There’s certainly no indication that the war is about to wind down. We’ve already seen a set of lower forecasts for global economic growth. And we are likely to see another round of lower projections in the coming week or two.
The Producer Price Index (PPI), which tracks prices at the wholesale level, showed a 2.4% month to month increase in food costs for March from February. the Bureau of Labor Statistics reported this morning. That was the biggest month to month increase in 10 months. The jump was driven by increases in prices for grains, vegetables, cooking oils, and pork. This is bad news for future Consumer Price Index (CPI) inflation–which hit an annual rate of 8.5% in yesterday’s report for March–since the CPI tends t track changes in the PPI with s long of month or two. Year over year food prices increased at a 16.2% rate.
The Consumer Price Index (CPI) rose at a year over year rate of 8.5% in March. That’s the highest rate since December 1981.
Economists surveyed by Reuters are projecting that inflation, as measured by the Consumer Price Index (CPI), will climb to 8.4% year over year for March against an 8% rate in February when data is released tomorrow before the open of the U.S. stock market.
Ukraine’s corn exports will drop by another 4.5 million tons to 23 million tons and wheat exports by 1 million tons, according to the U.S. Department of Agriculture’s closely watched World Agricultural Supply and Demand Estimates, or WASDE. World wheat stockpiles were revised down to 278.4 million tons. That’s below expectations. The problem isn’t a lack of supply. In corn, for example, Ukraine has huge stockpiles. But the war with Russia has shut normal export routes across the Black Sea. The expected shortfalls are putting severe upward price pressure on supplies from other producers
Minutes from the March meeting of the Federal Reserve released Wednesday, April 6, showed that only Russia’s invasion of Ukraine kept the central bank from raising benchmark interest rates by 50 basis points instead the 25 basis-point increase the Fed actually instituted at that meeting. “Many” Fed officials viewed one or more half-point increases as appropriate going forward if price pressures fail to moderate. The minutes showed the Fed proposing to shrink its balance sheet at a maximum pace of $60 billion in Treasuries and $35 billion in mortgage-backed securities each month. That’s in line with market expectations
Inflation as measured by the Personal Consumption Expenditures Index, the Fed’s preferred inflation measure, rose by 6.4% in the year through February, the government reported today. That’s the fastest inflation rate on this scale since 1982. PCE inflation ran at an annual rate of 6.1% in January. The core index climbed at a 5.4% rate after stripping out food and fuel costs. In January the core PCE ran at an annual 5.2% rate.
A Recession is coming! Probably.The odds are now high enough so that you and your portfolio should pay attention. So there are really three important questions. First, how likely is a Recession?In this Special Report I’m going to lay out the reasons for thinking that a Recession is on the way. Probably in the second half of 2022 or in 2023. Second, what strategies should you, as an investor, use to navigate in your portfolio through a Recession? In this Special Report I’m going to explain three strategies–call them general rules of the road–for investing during (and after) a Recession.
And, third, what specific stocks or bonds or ETFs or options should you use to implement those strategies to give you the biggest investing edge possible during this Recession? That’s where the 10 Recession Stock Picks come in. Look for that post tomorrow, March 22.
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My one-hundredth-and fifteenth YouTube video “Quick Pick Booking Holdings” went up today. This week’s Quick Pick is Booking Holdings (BKNG), the company that owns Priceline, Booking.com, Kayak, and a host of other travel booking sites. If you watched my video from yesterday, you’ll know I’ve been thinking about stocks to buy for the summer boom in travel. I think BKNG is a great story for that reason. They are major player in travel booking both domestically and internationally, with 30% of online travel bookings in the United States. Plus, since inflation will continue to stick around this summer (at least), bargain and discount sites will have even more users as travelers try to save money on trips.
