Joseph G. Witthohn, CFA
VP of Product Development Emerald Asset Management

Good morning.

Equities opened the morning on a positive note probably due … in no small part … to the growing belief that the worst part of the pandemic is certainly behind us.

But employment continues to be a problem and we are feeling policy ramifications as well-meaning lawmakers … following a great American tradition … believed that the solution to any problem is to throw money at it … but this generosity seems to be causing quite a bit of disruption in some areas as employers struggle to get skilled workers back on the job.

With fewer workers, backlogs are starting to develop … in fact, Daily Shot (citing Philadelphia Fed Manufacturing data) claims: “factories haven’t been this backed up on orders in decades” and an increase in delivery times creates havoc in schedules all down the line. 

How do manufacturers and states respond?   Some companies are requiring longer hours for workers even as they realize summer vacations might worsen the situation.  States are beginning to stop unemployment benefits put in place due to the pandemic, and talk has started up that some might even pay bonuses to those presently unemployed who do accept a job.  Meanwhile CNN tells us that some employers recognize they need to make it financially more advantageous for someone to come to work than to stay home.  How?  Pay more money.  Sure … but this unplanned-for expense might need to be added to the price of the product … and we all know what that means.  Inflation!

Yes, inflation.  The worry of 69% of fund managers, according to Banc of America.  How high might rising prices go?   Arbor Data Sciences, in viewing options markets, see a 40% chance of inflation being higher than 3% over the next 5 years.

Sorry.  Spent too much time yapping on inflation.

In other news, cryptocurrencies have taken it on the chin of late … as U.S. regulators try to get a bit more control over trades of its citizens, even going so far as to require IRS reporting for larger trades.  This also comes at a time that governments are thinking of ways to institute their own digital currencies … possibly falling into the camp of “if you can’t beat ‘em, join ‘em.”  

On a related note, you have to wonder to what degree the winding down of the pandemic is also affecting stock trading … in addition to the cryptocurrencies.   I mean … over the last year many have been indoors and once the attempt to binge-watching every Netflix show grew tiresome … it seems that online trading gained in popularity. This trading boom is highlighted in the fourth article below … and the numbers introduced in support of the article are interesting.

That is about it for today, as I want to finish up and go back to viewing a magician on some streaming site.  I can never figure out how they do things.

I actually watched a Mexican magician on YouTube last night and am still scratching my head. 

He said, “uno, dos …” and suddenly disappeared without a “tres.”  

… and so will I right now.

Have a wonderful weekend, 

Joseph G. Witthohn, CFA
Vice President
Emerald Asset Management PA, LLC
610 Freedom Business Center Drive
King of Prussia, PA 19406
Direct: (610) 285-9905
cell: (856) 625-7915

… As of 10:15 AM today …

Quick Look at the News

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