Good morning. After a few weeks of gains, markets have faced a few days of retreat … including today … leading some to ask: “is the bubble deflating?” But we should step back a bit and realize the S&P is still higher than it was a month ago, while the tech-heavy Nasdaq is little changed … though clouds have appeared overhead as tariffs may be starting to have an effect. Why do I say this? Home Depot was applauded a few months ago with their brave patriotic claim that prices would not rise because of the tariffs … but a company has a duty to shareholders and in the face of rising costs (which would reduce profits), the CFO just announced that … well … some prices will, in fact, be passed on to consumers. Estee Lauder (the perfume company) also announced concern over tariffs and feel the increases will result in a “substantial impact” on its profitability and announced layoffs to try to help reduce costs. There is concern that these moves might just be “canaries in the coal mine” as companies traverse a landscape must different than the one faced at the beginning of the year. Though minutes from the last Fed meeting will be released this afternoon, anticipation will probably increase over the possibility of a rate cut at the next FOMC session. We’ve already had one resignation and Chairman Powell’s replacement is expected to soon be announced … but there is a new wrinkle … as the President is calling for yet another governor to resign … one whose term is not scheduled to be completed until 2038. If successful in causing governor Cook to be replaced, you can be sure a new appointee will be in favor of lowering rates (or else probably not be selected in the first place). Complete Fed independence could be a tough sell in the years ahead. “Mom, dad … get in the car … it’s time for our interview!” In a seemingly crazy article below, a survey shows many GenZ job applicants not only have their parent’s help with applications … but some … a good amount … even insist on having mom or dad come to the interview. Sorry … but if I am interviewing someone, having mom or dad come in … or even call me to negotiate terms … is a non-starter … though I will gladly send you to a competitor with my best wishes as to your success. Meanwhile, I do need the markets to go up … as tonight’s Powerball jackpot is approaching $650 million. Drawings for Powerball are 3 times a week … at $2 per ticket … which comes to $312 a year … or $3,120 over 10 years. And that is just for one ticket. And those who buy just 5 tickets each time? Over 30 years, they will have spent almost $50,000. This is getting expensive … and I won’t even mention competing Megamillion which is now $5 a ticket. No … the fact is … they’ve captured me … hook, line and sinker. I complain about tariffs being a tax … but well … when you think about it … with the extremely low odds … I know I’m never going to win the lottery, but I have to keep playing because if I don’t … and the numbers I usually play come up … I’d jump out of my first story window. As my friend Doug often points out, lotteries are just a tax … … a tax on people who are very bad at math. Have a great day, Joseph G. Witthohn, CFA Have any questions? Please contact info@teamemerald.com
|
Call Us: +1 (800) 722-4123 
Back