According to new US government data, annualized interest payments on US debt just crossed $900 BILLION for the first time in history
Government spending jumped 15% in June, the same month we had the debt ceiling “crisis.” Ironically, in the same month we had a debt ceiling crisis, US Federal spending hit a near record and annualized interest expense crossed $900 billion. Source: The Kobeissi Letter
Dollar’s worst slump since November has some strategists saying a turning point is finally at hand for the greenback
Standard Bank expects ‘multi-year downtrend.’ Dollar bears can also lean on valuation measures. Dollar is overvalued in terms of purchasing power (Big Mac Index) against all major currencies except Swiss franc, the Swedish/Norwegian krona, and the Canadian dollar. Source: HolgerZ, Bloomberg
The S&P 500 is up 17.5% year-to-date. In the last 20 years only 2019 had a better start. $SPX
Source: Charlie Bilello
Wall Street is giving up on us recessoon risk as highlighted by a Wall Street Journal article
Jim Bianco Research shows consensus expectations for the coming quarters are pointing towards a very small contraction. The blue line is the June update of a survey conducted by Bloomberg of around 70 economists showing the median forecast for the next six quarters.
Bridgewater warns US inflation fight is far from over
The investment chief at one of the world’s top hedge funds has warned the US battle with inflation is far from over, and bets on a rapid series of interest rate cuts from the Federal Reserve next year are premature. Bob Prince, co-chief investment officer of Bridgewater Associates, said markets were wrong to assume the Fed will soon ease monetary policy. “The Fed is not going to cut,” he told the Financial Times. “They are not going to do what is priced in.” Pricing in futures markets indicates that investors anticipate one further 0.25 percentage point rate rise from the Fed’s current target range of 5 to 5.25 per cent by the autumn. Over the following 12 months they expect the central bank to reverse course, cutting borrowing costs six times to around 3.8 per cent by November 2024. “Inflation has come down but it is still too high, and it is probably going to level out where it is — we’re likely to be stuck around this level of inflation,” Prince said. “The big risk right now is that you get a bounce in energy prices when wages are still strong”, which could drive a rebound in inflation, he added. Prince, who oversees the Connecticut-based firm’s assets with co-CIOs Karen Karniol-Tambour and Greg Jensen, said he believes core inflation is likely to bottom out between 3.5 and 4 per cent, pushing the Fed to tighten monetary policy further and disappointing investors who this week sent US stocks to their highest level in over a year. That tightening “could take the form of holding rates steady in the face of expectations of a cut”, he said. Source: FT
Speculation is Back
Source: Bloomberg
The S&P 500's 25% gain since last year's low has been driven by valuation expansion rather than rising earnings
The S&P 500's 25% gain since last year's low has been driven by valuation expansion rather than rising earnings. There is hope that earnings will start recovering in Q3 and through 2024. Source: Edward Jones
Nokia sold 437 million phones in 2007. And Apple sold 1.4 million iPhones. Apple will sell more than 220 million iPhones this year
Nokia sold 437 million phones in 2007. And Apple sold 1.4 million iPhones. Apple will sell more than 220 million iPhones this year. And Nokia no longer makes its own phones. Source: John Erlichman
