This Week in Summary 9/2/2022

Sep 2, 2022 | Bubble Monitor, No Bull Economics

Bubble Monitor Graph

Fed Chair Jerome Powell made it clear that he is not going to be bossed around by inflation anymore and, suddenly, its risk-off in the markets which badly tanked during the week ended Thursday 9/1/22 (refer to our Bubble Monitor dashboard). During the previous summer rally, it would appear that investors originally thought Powell was a puffball that wouldn’t really raise the Fed Funds Rate to over 4% from the current range of 2.25% to 2.5%. But if this realization is not bad enough, we are starting to hear that the Fed Funds Rate should really be higher than the CPI inflation rate (8.5% currently)?? Such a course of action would certainly exacerbate an ongoing recession which is perhaps best illustrated by the Baltic Dry shipping index’s -45% decline over the last month. We hear from academics that we must accept recessions and associated job losses to get inflation under control which is much worse over the long term. Easy for these tenured professors to say… We keep urging all the sane minds to consider the role of supply shortages (have you tried to buy a car recently?) in producing higher prices which we call inflation. How will higher interest rates and higher unemployment provide the economy with more supply? Well, it won’t. But it will certainly pressure indebted consumers while throwing the housing market over the cliff (extinguishing the possibility for a chunk of consumers to duck skyrocketing rents). As horrifying as it sounds, there are some things that not even the Fed can correct. Maybe in the current case, it is only American industriousness and productiveness that can bail us out of this supply squeeze.


S&P 500 2Q22 Financial Wrap-Up

The Tale of Bank Deposits

Consumer Confidence and Gas Prices

Restaurant Franchisees = Canary in a Coal Mine

What’s Better Than Student Loan Forgiveness?

Follow us on LinkedInTwitterFacebook, and YouTube!

Disclaimer of Liability
Marketing NFS Graphic Updated
NoBull Posts Thumbnail
Restaurant Research

Email Sign-up

15 Second Posts

2Q23 Retail Same Store Sales

NoBull’s Retail Same Store Sales Report benchmarks 80+ large consumer retail companies by domestic same store sales including annual (2019 – 2022) and quarterly results (2Q22 to 2Q23).

Walmart Investor Presentation: Inflation Here to Stay

While general merchandise prices are lower y/y, they remain elevated compared to 2 years ago. As Walmart does not believe general merchandise and food (dry grocery) & consumable prices are ever going to completely disinflate, management suggests the need for a country-wide wage increase rebalancing.

Interesting Conversation with Fed Chair Powell

Okay, Powell didn’t actually take our call, but we offer a transcript of a potential discussion between the Fed Chair and John Q. Public. It’s very insightful, so please read on.

The Problem with Investment Diversification

Every investment advisor and business student knows that portfolio diversification is key to wealth building. Show me an investor who can beat the S&P 500 Index by buying a few handpicked stocks and I will show you a hedge fund manager in the making. However, there is a huge problem with this strategy that no one is talking about.

Part 3: Analyzing Performance of Low-Income Oriented Retail Companies

We created an index for the financial performance of 5 low-income oriented retail companies to assess the health of this demo. While we recognize that these companies have benefited from the trade-down of higher-income consumers, things look reasonable at least through calendar 2Q23. 

Part 2: Incremental Interest Payments Squeeze Disposable Income

In this post, we quantify the pressure on disposable income driven by credit card & auto loan payment increases since the onset of the Fed rate hikes in early 2022 in addition to the impact of the coming resumption of student loan payments in October 2023.

Part 1: Keeping an Eye on the Consumer’s Top-Line

The consumer’s top-line benefits from a high employment rate, generous raises, and a healthy savings rate which indicates an income surplus.

Teenage Wasteland No More

The American youth (15 – 24-year-old) unemployment rate makes our country look downright productive compared to the rest of the world!

The Fight for Global Manufacturing Gets Personal

Post-covid U.S. exports of goods & services have skyrocketed as American companies have worked hard to onshore their supply chains, providing them with products to sell overseas. Correspondingly, U.S. imports from China have fallen considerably since late 2022 after China’s extended covid lockdowns left their American customers without product to sell.  

China’s Deflation Looks Pretty Good Compared to U.S. Inflation

While the U.S. has been suffering from severe post-covid inflation, China’s prices have been spiraling lower. What’s up with that?

Digital Marketing Opportunities
Restaurant Research

A Restaurant Research LLC Company