Good Thursday AM,
PPI came out a little weaker than expected send both stock and bond prices higher (higher bond prices = lower rates). This was quite a surprise given all the supply chain issues, which have caused record shipping expense and other shortages around the world. These shortages should be leading to price increases for many of the raw materials that manufactures require to produce. Could we see 2 days in a row of gains in bonds in spite of the Fed announcing yesterday afternoon that tapering will likely begin in November? That would be a welcome respite from the 3 weeks of whooping we’ve taken. It’s the same old ‘buy the rumor, sell the news’. It is too soon to turn our back on inflation, but at least for now the market can focus on other issues. This rally looks like it has further legs, and as we have broken above the Fibonacci 38 level, it becomes likely that we may visit the Fibonacci 50 level, which gives us another two points of upward progress on the ten-year. The game plan is to watch and if we slip into the closing, lock; if not, maybe float to the following AM. Then rinse and repeat,
A couple of tidbits around the news today…
Home prices are currently up 20% year-over-year, but according to a new Goldman Sachs market forecast, they may not have reached their peak yet. Not even close. Goldman Sachs economists predict that home prices will grow another 16% by the end of 2022.
For many Americans, Covid lockdowns—with nowhere to go and nothing to do—were a time to save. But for almost 20% of U.S. households, the pandemic wiped out their entire financial cushion, a poll released Tuesday finds. The share of respondents who said they lost all their savings jumped to 30% for those making less than $50,000 a year, the poll from NPR, the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health finds. Black and Latino households were also harder hit. The researchers surveyed a nationally representative sample of 3,616 U.S. adults ages 18 or older.
Please remain safe and healthy, make today great.