Good morning. Tariffs … what tariffs? Retail sales were greater than expected in June, showing consumers have not reined in spending by any means. While one economist (Thomas Ryan of Capital Economics) gave the view that this should “dispel any fears … overall consumer spending is faltering in response to tariffs,” some might be moving purchases forward … just in case prices do jump. So far however, the worriers have not been proven right … and claims of “coming down the road” are repeated with each new report. The market reaction today to the retail report? A slight gain … as investors shift focus away from the Jay Powell story, keeping an eye on corporate earnings … especially AI related … just starting to trickle in. What Jay Powell story? I’m glad you asked. Reports late last week of Jay Powell’s firing intensified yesterday as Donald Trump reportedly told a room full of Republican lawmakers that there are plans to replace the Fed chair and Fortune Magazine reported Scott Bessent confirming “… the process was already starting.” Following almost immediate market pullback, the President was quick to publicly say his firing was “highly unlikely” … even as some attendees at the earlier meeting claim to have been told the opposite. Why does this story take on such importance? The Fed … the “central bank” of the U.S. … manages the country’s monetary policy … and is, in theory, independent. The President has not been shy about being disappointed with the present level of rates … and has gone so far as to announce the rate should drop by around 3% … a move which one Republican Senator of note says would “crush the market.” On top of this, there is no telling how the dollar would react … as investor confidence in our central bank could suffer … and suffer greatly. Okay … enough of that for now. The most interesting note I came across this morning is the last one below … which points out a few important items. It seems that … with markets rising along with wage growth … each day in the U.S. there are 1,000 new people able to claim the title of “millionaire.” But with almost 24 million millionaires in the United States … is it so special anymore? Maybe not. And it is unclear to what degree real estate is factored in (which will force me to try to find the original UBS report). While the author equates $1 million today with having a net worth of $165,000 back in 1975 … there is one point in the article that really stands out … the ever-increasing gap of wealth inequality. A second article below gives a studied opinion that people get more happiness from being kind than they do from being rich … with an obvious conclusion … to steal from an old cliché’ … “money can’t buy happiness” … but it seems kindness does. This is an important point to keep in mind. That will wrap it up for me today … for it is time to lace up my sneakers and get some exercise. I actually went jogging last night … and at times tried to see how fast I could sprint. Not a great result … for it seems: I run like the winded. Have a great day, Joseph G. Witthohn, CFA Have any questions? Please contact info@teamemerald.com
|
Call Us: +1 (800) 722-4123 
Back