Good morning:.
Stocks are mixed to start the day as the war in Iran seems to have taken a back seat and investors are once again focusing on earnings and economic reports.
One important item comes out tomorrow regarding inflation … and economists feel it will show a slight increase … but here is the issue … as there is a difference between two components, “headline” and “core.” Headline CPI (“Consumer Price Index”) relates to overall inflation and is expected to be 3.4% while core inflation (which removes energy and food) has a 2.5% expectation. The announced result could move markets tomorrow … though the Fed might be more interested in the PCE (“Personal Consumption Expenditures”) report due out the end of the month.
Either way, both numbers appear to be above the 2% Fed target … so … unless something bad happens with employment … it looks like a long way to go before rate cut announcements take center stage.
Oops. Yesterday I mentioned how much I like a show that I finished binge watching. While meaning “Your Friends and Neighbors” I made the error of writing “Your Friends and Family” and am glad a reader sent me an immediate note both pointing out my slip-up … and questioning my sanity.
The University of Michigan is dropping grades for first-semester students and, instead, instituting “pass-fail” to “ease pressure” according to the Wall Street Journal. I am actually in favor of this as one of the biggest end-of-the-semester issues I face in classes I teach is having a student with … for example … having a grade of 94.8 (B+) or even a 94.4 while a 95 gives them an A grade. I constantly get the notes asking for “just a little boost” and hate going through it. I’d rather have the kids focus only on learning.
I included a report today claiming too much of a sports drink is not good for you – even as the message and picture on the bottles promote health. As an aside, we are also seeing people gobble up as much protein as they can, as its sudden and loud appearance seems to be on so much food packaging nowadays. Too much of this is also questionable. Fortunately, plenty of coffee is fine (per another article below) and actually good for you … with this sentence being written as I sip my second cup.
Meanwhile, I was very much in favor of legalizing cannabis … remembering my college days when friends would use weak amounts quite freely (ahem). But reading in the article below that more people use cannabis than alcohol on a near-daily basis shocked me … along with claims of negative effect from such overuse. My opinion on this is changing … especially as I see the strength of it so much more powerful than what the baby boomers of today might have used in … well … the good old days.
The note below that I found interesting is the claim is that 76% of younger Americans “overspend” … just to fit in with their peers … and this includes celebrations, dining out and, of course, wearing designer stuff. I’ll never forget the dinner I had with a friend and his son where the 20-year-old was asked what he wanted for Christmas … and the request was for a $300 T-shirt “so that his friends could see he was wearing it.” That was an actual quote. By the way, when the father correctly said it was a bad decision it was revealed the boy’s mother had already purchased it.
Fortunately, “peer pressure” seems to be relaxed as people get older as purchases are made for comfort and not concern over what others think.
Please keep that in mind if we cross paths as I am out shopping today.
For it might be me wearing those orange plaid shorts, with a green plaid shirt and high socks
… to each his own.
Have a great day,
Joseph G. Witthohn, CFA
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