WASHINGTON (MaceNews) – Who cares if AMC is up more than 40% one hour and then down 2% another hour, that the U.S. Senate wears itself out going nowhere, that the Biden administration’s budget wish list sees growth back down to 2.2% then lower after next year. Not to worry, we’re at the beach – finally.
The disappointment with SPACs, thematic investing, Bitcoin, the kind of sideways performance of the major stock indexes since mid April, the demoralizing NBC, CNN, NYT, WSJ and other documentary reprises on the occasion of the 100th anniversary of the Tulsa massacre, they can be put aside for this moment of recovery bliss.
Sure, we’re going to overdo it. That aggressive India virus variant that has shown up in the United States and could threaten the lives of the unvaccinated is not going to reanimate the vaccination centers, at least not yet. The eruption of even worse variants possible with so much virus transmission elsewhere in the world is not going to burst the recovery bubble, again, at least not yet. While we’re abandoning masks the virus mechanistically probes our defenses as those defenses improve more slowly.
So disappointments on the one hand and on the other, post-pandemic euphoria which is upon us and may or may not be premature. Government cash remains a massive influence on personal decisions. Eviction moratoriums are not expiring just yet.
All the same, the markets’ imperative is to push to the horizon and beyond, not to be entirely captured by whatever is the current mood. Even someone as indefatigably positive as ARK investments founder Cathie Wood, who sees a magnificent future over her five-year horizon, also sees the possibility of a “severe” near-term correction.
The oft-cited Costco earnings call this week warning about all the inflation happening its products, labor and services that was so ominous, coupled with all the other inflation warnings from market analysts on a daily basis, are hard to ignore.
And so is the seasoned advice that is still somewhat muted about what happens when commodity prices collapse, when unprecedented stimulus starts to dwindle, when consumers return to services spending and away from goods. It could look like, as Cathie Wood predicts, massive deflation. So is inflation merely transitory or starkly aberrational?
The aspirational components of the Biden administration’s FY’22 budget wish list, unveiled Friday, had a bottom line, after all. Despite the many reasons it offers to build back better, its anticipated 2023 growth rate is only 2.2% slowing to 2% or less the rest of the decade. You would expect more aspiration.
The trim-tab nature of market influences keeps demonstrating that it doesn’t take massive reverses to change the course of investor psychology. Small relentless pressures can change the course of the ocean liner very effectively. As Exxon welcomes its new “green” board members its old hands may reflect on how soon those relentless pressures can corrode its momentum, its culture, the prospects of an entire industry that was so invulnerable so recently.
The federal holiday will pass quickly. Even those who don’t remember when it was called Decoration Day, who don’t absorb the somber purpose of the day to decorate the graves of the fallen, who don’t have a vivid sense of the incremental advance of the world around us built on the sacrifices of the past, can still appreciate how each generation contributes to the next.
Massive debt, coupled with massive investments in a productive future and the willingness to sacrifice now for children and grandchildren add up to what 2030 and 2040 can become. We’re told to buy, not sell at the bottom and to be humble enough to realize there could be deeper bottoms to come, followed by … . Meanwhile, there’s the beach.
The upcoming week’s economic data points and Federal Reserve events are listed before, highlighted by next Friday’s May jobs report:
UPCOMING ECONOMIC DATA AND FEDERAL RESERVE EVENTS
Monday, May 31 – US federal holiday
Tuesday, June 1 – 9:45a ET Markit May final mfg PMI
Tuesday, June 1 – 10a ET US Apr construction spending (Mar +5.3%)
Tuesday, June 1 – 10a ET US ISM May Mfg Index (Apr 60.7)
Tuesday, June 1 – 10a ET, Fed’s Quarles conversation, Politco Live (no text)
Tuesday, June 1 – 10:30a ET. Dallas Fed May Mfg survey (Apr 34.0, -14 pts)
Tuesday, June 1 – 11a ET JPM May global mfg PMI (Apr 58.8)
Tuesday, June 1 – 2p ET Fed Gov Brainard speaks, Econ Club/NY (text & Q&A)
Wednesday, June 2 – 7a ET US MBA wkly mortgage applications (prvs -4.2%)
Wednesday, June 2 – US auto sales
Wednesday, June 2 – 8:15a ET ADP/Moody’s Analytics May private payrolls
Wednesday, June 2 – 8:55a ET Johnson-Redbook wkly retail (prvs +13.5%)
Wednesday, June 2 – 12p ET Philly Fed’s Harker speaks, minority biz at Minn Fed
Wednesday, June 2 – 12p ET ChiFed’s Evans speaks on minority biz at Minn Fed
Wednesday, June 2 – 2p ET – Fed’s Beige Bk survey for June 15-16 FOMC
Wednesday, June 2 – 6:05p ET – Dallas Fed’s Kaplan, conversation, at DA Fed
Thursday, June 3 – – 7:30a ET – US Challenger May layoffs (Apr 22,913, -25%)
Thursday, June 3 – 8:30a ET US wkly new jobless benefit claims (prv 406K)
Thursday, June 3 – 8:30a ET US revised 1Q productivity (prvs ULC -0.3%)
Thursday, June 3 – 9:45a ET US Markit May composite svcs/mfg PMI (Apr 63.5)
Thursday, June 3 – 10a ET US ISM May services PMI (Apr 62.7%)
Thursday, June 3 – 11a ET US EIA wkly oil stocks (prvs -1.7 mln bls)
Thursday, June 3 – 12:30a ET AtlFed’s Bostic opening remarks
Thursday, June 3 – 1:50p ET Philly Fed’s Harker speaks on equitable workforce
Thursday, June 3 – 3:05p ET Fed’s Quarles speaks at SIFMA reg conference
Friday, June 4 – 7a ET Fed’s Powell speaks, BIS climate conf (no text/YouTube))
Friday, June 4 – 8:30a ET US May jobs report (Apr payrolls 266K)
Friday, June 4 – 10a ET US Apr factory orders (March +1.1%)
Friday, June 4 – 1p ET Baker-Hughes wkly rig count (prvs US +2/457)
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Contact this reporter: denny@macenews.com.
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