This week opened with the NASDAQ index hitting a new high in a rebound from the previous week's decline. Last week, economic growth was called into doubt by the Delta variant as well as economic estimates that fell short. The sentiment has changed this week with a lower fear of Delta having a long term impact, but just shifting demand. The Federal Reserve has a big conference this week that was moved from in person...
A new week, a new set of crises. Rising to the top is Afghanistan and American troop withdrawal. In addition, we have the Covid-19 Delta surge and its impact on health, travel, and the economy. This displaced Andrew Cuomo, the Governor of New York and the January 6th Congressional investigation. Unfortunately, one lesson that is evident is if you are in the news in a bad way, just wait and you will be replaced by...
Infrastructure Spending This week the Senate passed a bipartisan infrastructure bill with a cost of $1T. The amount stems from left over Covid-19 American Rescue Plan funds coupled with a proposal to report and tax cryptocurrency transactions. The Congressional Budget Office reports it will add $250B to the existing budget deficit. Half the bill is new spending and not part of any other legislation or previous spending program. Some non-traditional infrastructure items are being funded...
As the Delta variant spreads more aggressively than the original infection, America’s reaction consists of more separation- vaccinated from unvaccinated. The surge is happening among the unvaccinated accompanied by a low rate of breakthrough cases in the vaccinated. Our political leaders are hesitant to declare mask mandates because Americans thought and acted like the pandemic had ended. Even Dr. Fauci says there is no need for mandatory mask wearing. One hope is that the news...
Market Analysis Market analysts use facts to justify their outlook for future performance. There are many facts at their disposal and selecting only the facts that confirm their outlook is part of the game. Generally, my advice is to tune out those analysts because their track record is spotty at best. I viewed a webinar on one firm’s outlook for the rest of 2021, mostly because I earned 1 hour of CE (Continuing Education credits...
Market Update It’s official; the shortest recession in US history has been officially declared- 2 months! It was also one of the steepest. Does anyone remember the fear, paralysis and unknown of a public health emergency? The recovery in asset values has also set records. Stock prices, housing values, price and wages increased as well as record low interest rates. Makes your head turn for sure. This week, the Delta variant caused great concern in...
Earlier in my career I worked in health care. The Foundation for Shared Medical Decision-Making was my employer. They created video programs to assist patients who had been diagnosed with certain conditions for which the patient had decision options for treatment. The goal was to actively involve the patient in the decision making process because research said that the more actively involved the patient is in the decision making in regard to treatment, the more...
At the most recent G-7 conference finance ministers agreed on a minimum corporate tax rate of 15%. There are actually 2 pieces to the proposal: one piece taxes corporations in line with the country they operate in by taxing profits over 15%, and the second establishes a minimum corporate tax rate among the G-7 of 15%. The details are far from being worked out and, of course, the devil is in the details. What impact...
In the News Two major issues in the news this week and they are related. The collapse of the Florida shoreline condo building and a tentative agreement on an infrastructure bill by a group of Democratic and Republican Senators and the Biden administration. With the unclear source of the collapse but much speculation, there is a significant possibility that construction that was up to code in 1980 did not consider the impact of climate change...
The Federal Reserve made its decision to keep short term interest rates at their current levels. The statement also shortened the time to expect an increase in short term rates. The Fed states that inflation is transitory as the economy returns from the pandemic induced recession. Sure enough, market reaction was a sell-off resulting in the worst performance of the major averages this year. The one day drop last Friday shook markets. The impact on...
As we began this week’s newsletter we were awaiting the dissemination of the results from the Federal Reserve June meeting. As usual, economic data is mixed in many regards and depending on what you want to conclude about asset values. Inflation, the latest area of investor concern, seems to have stabilized, with mortgage rates headed lower this week along with otherwise stable interest rates that have fallen further this month. Concern in regard to inflation...
JoBeth and I took our first post-Covid-19 airplane flight this past week. We visited my children in Taos, NM, and stopped in Santa Fe, NM for a couple of nights. There was a distinct contrast in mask and social distancing between San Francisco and New Mexico. NM has a high vaccination rate but compliance with public health measures was notably less stringent than SF. It was a bit shocking to us and we still made...
