Good morning. Boy, there is so much happening. The market run-up was fun while it lasted … but even though it is not raining … today will be no picnic as investors review the downgrade by rating agency Moody’s, which is driving up the cost of U.S. borrowing. It seems that the rating agency is increasingly concerned about U.S. debt … not only criticizing the increases over the last dozen years but looking forward they sense little will be done to get it under control. Meanwhile, the Treasury Secretary blames the Biden Administration for increasing the debt … but, frankly, it is also the fault of the administration before that … and before that … and before that too. We live on debt … it’s what we do best. On top of that, we might soon experience effects of the tariffs … even though the president is putting pressure on companies to absorb much of any added costs … going so far as to tell Walmart they should “eat the tariffs” … as they can afford to … but we recognize smaller, less profit-heavy retailers might not be able to eat anything at all … as they are less able to absorb cost spikes that result. One concern is how Americans will react to higher prices. While DailyShot and University of Michigan shows increasing … highly increasing … investor concerns with declining confidence in the economy … such claims are based on surveys for which actual consumer behavior sometimes doesn’t match up. It will be actual numbers … coming out in the next few weeks that give a truer indication on any changing spending habits. Speaking of habits, quite a few people started using those GLP-1 drugs … with the hope of losing weight. The claim, of course, is once people go off of these drugs they will rush out and devour everything in sight … revisiting their disappearing pounds. A study by Morgan Stanley Research shows this might not necessarily be the case … as while some do return to their old habits … to the tune of 20% … around 30% to 40% of users continue to cut back on portions similar to when they were on the drug. That will wrap it up for me today as I try to recover from the weekend. Graduations galore … as we toss young adults into the world newly armed with the ability to fend for themselves. As for me … I don’t much like graduation ceremonies … as they are too long and there are too many rules such as no shouting, no clapping and no using your cell phone. What else am I going to do to entertain myself … watch 450 kids I don’t know? I just don’t think these events to be fair. I mean … sure … let the person with the top grades give a speech about sacrificing to excel and give advice to classmates about to go out in the world with reckless abandon … but I want the person with the lowest scores to also give a speech. I’d just like to hear both sides. Have a great day, Joseph G. Witthohn, CFA Have any questions? Please contact info@teamemerald.com
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