A partial digest

American infrastructure spending is supposedly nearer at hand (or is it?), and US indices just keep climbing, which is just sketching some people out.

Quick read for the week ending June 25:

A partial digest

Many markets did not fare well this past week, the DOW and gold in particular. Premature bets continued to be placed, which is to say that many people, traders, investors, however we refer to them, have been gambling, far and wide. Meme stocks and crypto and social media users get so much attention, yet there is actually very little separating folks at this time, including the “smart money” (which rarely looks that smart anymore, if it ever did).

There are many different groups, including the group that made the premature bet that the Fed would be forced to raise rates…

A partial digest

Which market didn’t seem to care about the big bad “inflation” wolf? US Treasuries. Yields have been falling as if because of the latest CPI data, 5% YoY.

In turn, the NASDAQ and similar gained for the week ending June 11, while gold fell. It is possible that, (gasp!), the Fed might be taken seriously after all regarding the assessment that high inflation figures will be fleeting.

Quick read for the week ending June 11:

CALL: No change…

A partial digest

All assets reacted to the jobs data at the end of the week and what it says about economic support and any recovery. The health of the labor market, as discussed here week after week, is central to all else. Weakness there implies more need for support, which fuels various bets.

On the back of a 3.6% rise in YoY PCE for the month of April, the jobs report released Friday for May once again disappointed. …

A partial digest

Quick wrap for the week ending May 28:

CALL: No change; near to semi-intermediate term, prices could rise further given supply shocks, OPEC+ micromanagement, inflation expectations, "recovery," and more fiscal spending, among other things. Longer term, it's a dying industry.[tracking: XLE, GGN]
[tracking: TAN]
CALL: In the very near term, it must be acknowledged that gold has the uncertain potential to rise further as traders who…

A partial digest

The crypto market imploded, then imploded again in spectacular fashion. At one point, more than $1 trillion market cap had vaporized. The hits just kept on coming. If buying the dips, extreme caution is advised.

The space is facing multiple headwinds, including the investigation of the Binance exchange (one of the largest); what the IRS and Treasury want; concerns with the Tether stablecoin’s reserves; China’s unforgiving stance on crypto; good old-fashioned forced liquidations of highly leveraged positions; and Elon Musk’s market manipulating statements. The latter party may draw some regulatory scrutiny, himself.

A very clear issue that will remain and…

A partial digest

There is a simple factor contributing majorly to the steep inflation number of 4.2% for the 12 months (UA) ending April 2021; oil prices were negative one year ago April, and the industry was cratering. The energy category, along with its subcategories, had the highest numbers in the BLS’s latest report. Gasoline alone for the 12 months ending April 2021 saw a nearly 50% rise.

The Fed and others should know this; and the jump in official inflation figures will prove fleeting.

By May 2020, crude oil was recovering, though gasoline took longer. …

A partial digest

The current US administration is entering a predicament phase, facing the conundrum of seeking to spend more without the comfort of knowing that it can easily borrow more to do so. Apparently Treasury has been doing things in a certain way to avoid hitting the debt ceiling, but it’s capacity to do that may be coming to an end in the summer timeframe, says Yellen.

Earlier in the week, Yellen walked back remarks about an impending recovery and rates rising accordingly. For their part, PIMCO and Goldman Sachs think the recovery and inflation, or reflation, trade, and any subsequent raising…

A partial digest

A partial digest:

Thursday was day 100 of the Biden-Harris administration. Meanwhile, another stimulus package is being floated.

US GDP grew at an annualized rate of 6.4%. PCE was high at 10.7%, while the PCE price index came in at 3.5%. One should remember that these figures were facilitated by stimulus checks, and those are fleeting. In quarters where little to no fiscal aid was provided to the general population in 2020 or prior years, PCE was predictably much lower.

What this signifies, in part, is that we still have no reason to expect sustained systemic inflation, yet.

Quick wrap:

A partial digest

Friday was day 94 of the Biden-Harris administration. There is a proposal to raise capital gains taxes a significant amount to the highest the rate has been post WWII, but only for a very small percent of wealthier individuals. Raising the top marginal income tax rate is being floated, as well. Traditional financial markets didn’t take long to shake it off, though. Crypto has been another story, which may say something about who owns a good chunk of it.

While on the topic, a brief review of the history of capital gains taxes is in order. The record reveals that…

Philip Valenta, MSF

Intersectionist :: https://philipvalenta.com

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