Good morning. Stocks are on the rise this morning and an article on Yahoo gives the view that this is due to a bit of relief that “Middle East tensions show signs of easing.” I guess some have information other than what is being reported on major news channels … because all I keep reading about are stories on bombs being lobbed into major cities of both Israel and Iran. On top of this, Daily Shot reports (via information on the Polymarket betting site) the probability of the U.S. bombing Iran within the next few weeks is now at 35% … which is a bit too high for my tastes. Of course, this is just guessing for the most part … but some are putting together thoughts under different scenarios. One example is JP Morgan … as while their “base case for oil” is $60/barrel, their view is if “tensions escalate” … oil can jump to $130/barrel. Oil spiking, of course, would impact us here … as prices on some goods would jump … and the smiles we’ve had lately when seeing gas prices would quickly disappear … as pocketbooks would suffer … especially during the summer holidays. Consumers have been taking everything in stride as U. of Michigan reports a spike in Consumer Sentiment … but a couple of retailers are claiming tariffs have already taken a toll … as not only has one major auto supplier (“Marelli”) file for bankruptcy … but so has “At Home” … with 260 stores. In the recent U. of Michigan sentiment data, inflation expectations are still high with the consumer view of 5.1% one year out and 4.1% in the 5-10-year period. This could indicate “over worry” as it might be worthwhile to keep in mind that pre-Covid inflation was rarely above 2% and things have seemed to settle down from jumps seen in the 2021-2023 timeframe. Just two more things. There was a disturbing note out this morning by Morning Consul showing that “global average net favoritism” of the U.S. was fairly high and quite steady up until January … but took a “nose dive” (an economic term) … and China … long looked upon unfavorably … is now more popular … by quite a bit … over the U.S. Ouch. Not helping matters any might be the large number of “ambassadors” (aka. “tourists”) we send around the globe … and while foreign economies benefit and enjoy the dollars spent … locals are getting a bit tired of us. One article pointed out this morning that some in Spain are using water-guns to squirt tourists … showing a bit of disdain. And the most popular museum in the world … the Louvre … is actually closed today … as the staff claims feeling too overwhelmed by the throng of visitors. This is in addition to recent concerns by citizens of Venice … where reports are the city is overrun by tourists … thanks, in large part, to crowded cruise ships arriving on a daily basis. Okay, that’s it for now. On a side note, I brought a guest from England to New York to see John Krasinski (of “Office” fame) in what is mostly a one-man play … “Angry Alan.” He was fantastic … absolutely fantastic … in my view. But my guest insisted on waiting afterwards (with the crowd) to try to get an autograph. A Friday night and he just finished a 1 ½ hour show … so I was convinced he would rush out … get in the waiting car … and get some well-deserved rest. Instead, he came out … signed autographs, took selfies … talked to people … thanked them time-and-time again … and just appeared so honestly gracious that … well … I enjoyed that as much as the show … which I very much enjoyed and would consider seeing again. Have a great day, Joseph G. Witthohn, CFA Have any questions? Please contact info@teamemerald.com
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