Written by Gary
US consumers burn through almost all COVID ‘Excess Savings’ as buying intentions crater (SPY -0.5%). Interest rates haven’t been this low in 5,000 years.
Here is the current market situation from CNN Money | |
 | North and South American markets finished mixed as of the most recent closing prices. The Bovespa gained 1.21%, while the IPC led the S&P 500 lower. They fell 1.14% and 0.06% respectively. |
What Is Moving the Markets
| Here are the headlines moving the markets. | |
| Analysts See Oil Trading Closer To $70 Through Year-EndOil analysts and economists believe that $70 a barrel is a more realistic outlook for Brent Crude prices for the rest of the year than $80 oil, as COVID variants and the geopolitics of oil will continue to be a source of volatility on the market, the monthly Reuters poll showed on Friday. Brent Crude prices are expected to average $68.76 a barrel this year, 38 analysts and economists who took part in the Reuters poll said. The forecast from end-July is higher than the June estimate in the same poll, where analysts had predicted Brent Crude prices |
| Chevron Resumes Share Buybacks After Q2 Profit Beats EstimatesChevron (NYSE: CVX) is resuming share repurchases after reporting earnings above expectations for the second quarter on the back of rallying commodity prices. Chevron reported on Friday adjusted earnings of $3.3 billion, or $1.71 per diluted share for the second quarter 2021. This compares with $1.59 earnings per share (EPS) consensus estimate of analysts compiled by The Wall Street Journal. Chevrons second-quarter 2021 earnings compare with a loss of $2.9 billion it posted for the second quarter of 2020, when the market and demand slump |
| Natural Gas Deficit Causes Prices To SoarNatural gas prices are rising across Europe and Asia due to tighter supply of the commodity, lower production in Europe, and lower exports from Russia, the Financial Times reports, noting the supply crunch may intensify in the coming weeks. In Europe, the report notes, prices for natural gas have hit 40 euros per mWh for the first time ever, with UK gas prices at the highest in 16 years. This is equal to approximately $14 per million British thermal units. In Asia, gas prices have hit $15 per mmBtu. The price situation may worsen still, according |
| Tesla’s Giant Australian Battery Bursts Into FlamesThe giant Tesla lithium-ion battery that French Neoen is building in the Australian province of Victoria is burning, according to the fire and rescue service of the province. “A 13 tonne lithium battery in a shipping container is fully involved with crews wearing breathing apparatus working to contain the fire and stop it spreading to nearby batteries,” Fire and Rescue Victoria reported earlier today, adding that there was no threat to local residents or drivers despite the release of smoke at the sight. The battery installation, with a capacity |
| ExxonMobil Beats Earnings Estimates As Its Chemicals Business BoomsHigher oil and gas demand and the best-ever quarterly performance in the chemicals business helped ExxonMobil (NYSE: XOM) beat analyst expectations as it reported second-quarter 2021 earnings of $4.7 billion. Exxon posted earnings per share of $1.10 assuming dilution for the second quarter, ahead of the $1.01 EPS consensus estimate of analysts compiled by The Wall Street Journal. The earnings for Q2 2021 compare to a loss of $1.08 billion Exxon had booked for the second quarter of 2020, when it reported its worst loss in its modern history because |
| Is Americas Oil Industry Too Big To Fail?The Biden administration is making strides in reducing the United States dependence on fossil fuels for its energy needs. The federal governments post-pandemic plan involves hundreds of billions in financing for renewable energy and electric vehicle projects. But it might be harder to get rid of oil and gas than some would like to believe. In a recent report commissioned by the American Petroleum Institute, PwC described the oil and gas industry as a critical one for the United States in terms of both direct and indirect impacts in |
| U.S. consumers ready and willing to spend more now than before Covid, Mastercard CFO saysAn “aversion to cash” is leading to an increase in digital payments, Mastercard CFO Sachin Mehra told CNBC . |
| Walmart will require workers to wear masks in stores in high-risk U.S. countiesWalmart said it will begin requiring masks for store workers in high-risk counties in the U.S. as determined by the latest CDC rankings, effective immediately. |
| Want to go to a Broadway show or Carnegie Hall? Get ready to show Covid vaccination proofThe Broadway League announced Friday that it will require vaccinations for audiences, performers, crew and staff. |
| Hydrogen produced using renewables will be able to travel through existing gas pipelines, Snam CEO saysMarco Alverà made his remarks during an interview with “Squawk Box Europe”. |
| Consumers did great job paying down credit card debt during pandemic. That may be endingRecessions cause higher credit card delinquencies, but not Covid. Consumers bucked history, paying down debt with stimulus and spending less, but is it ending? |
| MyPillow pulls ads from Fox News after disagreement over commercial linked to election-fraud claimMyPillow’s Mike Lindell said he’s pulling ads from Fox News after the network said it wouldn’t take one of his commercials linked to election-fraud claims. |
| Top NBA pick Cade Cunningham wants to be the next LeBron James in businessThe Detroit Pistons selected Cade Cunningham with the first overall pick in the 2021 NBA draft. He now has three endorsement deals. |
| CDC warns that delta variant is as contagious as chickenpox and may make people sicker than original Covid“The war has changed,” CDC officials wrote in a confidential document given to lawmakers this week. |
| Dr. Scott Gottlieb estimates up to 1 million Americans infected with Covid daily as delta spreads“I wouldn’t be surprised if, on the whole, we’re infecting up to a million people a day right now,” Dr. Scott Gottlieb told CNBC on Friday. |
| Burger King parent earnings top estimates as domestic digital sales grow nearly 60%Restaurant Brands International topped Wall Street’s estimates for its second-quarter earnings and revenue. |
| Procter & Gamble earnings beat, but company warns cost pressure will weigh on future profitsThe maker of Tide, Charmin and Pampers is on track to raise prices on some products this fall. |
| “It’s Probably Time To Sell!” – Guggenheim’s Minerd Warns Of Delta’s Looming Threat To Risk Assets“It’s Probably Time To Sell!” – Guggenheim’s Minerd Warns Of Delta’s Looming Threat To Risk Assets Authored by Scott Minerd via GuiggenheimPartners.com, Things Couldn’t Be Better The COVID Delta Variant’s Looming Threat to Risk Assets. When asked why Guggenheim frequently comes up with out-of-consensus and sometimes seemingly crazy views, I remind people that our process is driven by data and not opinion which can be affected by emotion or pressures to conform to opinions of others. The consensus is often a warm and fuzzy place where others join, providing the comfort associated with agreement and a sense of community and safety. And if the consensus is wrong at least you have company with whom to lament and console. Nevertheless, none of this pays the bills. Having opinions outside of the consensus can be a lonely and isolated place without comfort from others while exposing oneself to harsh criticism and moments of self-doubt. No one can ever be right 100 percent of the time, and there is always some probability that you can misinterpret the data. |
| Arkansas Judge Orders Unemployment Stimmies To Continue Despite 40,000 Vacant JobsArkansas Judge Orders Unemployment Stimmies To Continue Despite 40,000 Vacant Jobs A liberal judge in Arkansas has ordered the state to resume federal pandemic unemployment benefits just one month after they expired, in yet another glaring example of why there’s a huge gap in unemployment claims between red and blue states (despite Arkansas being a red state).
On Wednesday, Pulaski County Circuit Judge Herbert Wright issued a preliminary injunction so the state can resume participation if the government will “agree to permit the State to do so.” “If the appropriate federal authorities reject such a reinstatement, the State will immediately provide proof of such communication to the Court,” said Wright. The decision stems from a lawsuit filed last Friday on behalf of five citizens seeking to enjoin the state from ending pandemic-related unemployment programs, which provided an e … |
| Big, Bigger…East India CompanyBig, Bigger…East India Company By Michael Every of Rabobank Big, Bigger,…East India Company Q2 US GDP was a shocker at just 6.5% q/q annualised vs. 8.5% expected. That was little changed from 6.2% in Q1, when the US hadn’t yet ‘beaten Covid’, and so was a jab to markets expecting jabs to have delivered more. The details can be sliced and diced this way and that and will be revised endlessly, more so given the extraordinary times and that some of the data was probably literally phoned in. Nonetheless, the picture is that without the huge fiscal transfer from the public to the private sector, allowing for personal consumption to be up 11.8% q/q annualized like Q1’s 11.4% print before it, the US economy would have been even weaker. It certainly was not a GDP report that showed any sign of private investment rebounding: not in a V-shape œRoaring 20’s fashion –remember that idiotic meme, if taken without any historic irony, from all of 6-7 months ago?– nor even to a œrubbish pre-Covid New Normal ” and remember that meme? The last four quarters’ figures for real private sector fixed investment are, starting in Q3 2020, now: 27.5%, 17.7%, 13.0%, and just 3.0%. Where next? On which note, it appears we are no closer to any fiscal stimulus ” or at least that’s the market’s view given 10-year US yields are this morning at 1.27%. Indeed, ‘all of a sudden’ the US debt ceiling looms as a possible fiscal cliff, the complete opposite of the reflation story that pushed up yields in Q1. Further, a White House press conference yesterday left the rhetorical door open to renewed lockdowns if the science (i.e., the CD … |
| US Consumers Burn Through Almost All COVID ‘Excess Savings’ As Buying Intentions CraterUS Consumers Burn Through Almost All COVID ‘Excess Savings’ As Buying Intentions Crater While most economists were keenly focused on today’s core PCE data in the Personal Income and Spending data, we were far more interested in the spending power left inside the dynamo that is responsible for 70% of US GDP: the US consumer. And unfortunately, there is very little left. For much of the post-covid recovery period, the most bullish narrative was that the trillions in excess savings (the number $2.5 trillion had been frequently thrown about) resulting from the trillions in Biden stimmy checks which Americans ‘prudently’ saved would provide a long enough runway to allow US consumers to offset transitory surging prices with money they had saved up. There is just one problem: according to the latest data from the BEA, excess savings are almost gone and as of June, there were just $1.7 trillion in annualized personal savings, a huge drop from the $2.5 trillion average observed for much of the post-covid period when Savings peaked predictable after the 1st, 2nd and 3rd stimulus hit America’s checking accounts. Alas, almost all of that is now gone, and as of the latest data, US consumers have just 30% more savings – or about $400 billion – compared to the pre-covid level of $1. 3 trillion. |
| Amazon hit with $886m fine for alleged data breachThe tech giant rejects claims it has broken European Union data protection laws. |
| British Airways owner IAG to ramp up flightsIAG, which also owns Iberia, says it plans to run at 75% of its 2019 passenger capacity by the end of the year. |
| Eurozone out of recession after economy grows 2%Data suggests all economies in the 19-country bloc expanded in the last three months. |
| Investors lose $1 trillion in China’s wild week of market shocksThe nearly $1 trillion selloff ignited by Beijing’s shock ban on profits at tutoring companies has triggered a new round of soul searching about the investment case for Chinese assets in the Xi Jinping era. |
| Liquidity surplus expanding but OMOs must continue – RBI stuck in the middleUnless the RBI steps in to purchase the 2031 paper under open market operations, treasury officials see yield on the benchmark security rising even further in the coming days. |
| Market Movers: Two factors that triggered big spike in Sun PharmaSun Pharma’s 10 per cent rise came after the company’s firm but lower-than-expected numbers for the quarter ended June. |
| IPO Report: Dole IPO: 5 things to know about the newly-public fruit and vegetable giantDole is one of the biggest producers of bananas and pineapples in the world. |
| : Here’s how much the 2021 NBA draft picks will earn on their rookie contractsNo. 1 pick Cade Cunningham will make an estimated $36.8 million from his rookie contract. |
| NewsWatch: Interest rates haven’t been this low in 5,000 yearsHow is this for a historical comparison — interest rates are at a 5,000-year low. |
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