The Market: The Thanksgiving Surge -- November 4, 2021

The war is over! There is a feeling among some CEOs that Americans feel they have just come out of a war. Think about that. 

Dividend increases announced:

• EOG; raises regular dividend 82% -- $3.00 annualized rate, so 75 cents/share; declares special dividend of $2.00 / share -- November 4, 2021; payable 12/15/21

Headwinds coming out of October, going into November -- gobble, gobble, gobble:

• Halcyon days for investors: Jim Cramer, link here; posted November 4, 2021.
  
• The Fed: November 2, 2021 -- Jay Powell could not have been more dovish. Incredibly transparent.
• the Fed has two mandates: control inflation at max employment
• Jay Powell said he needs to re-visit the definition of full employment (I've said the same thing)
• seems to be more concerned about middle class; the "working American" as the Dems call them
• knows that the "working American" is checking his/her IRA daily when times are good
  
• Inflation? What inflation? 
• weekly jobless claims: better than expected;
  
• most interesting: no one knows what causes inflation; previously posted;
• Americans "adjusting" to inflation
• Jay Powell suggested the same again this week at the November 2, 2021, Fed meeting 
• two-year bond yield at multi-year low
• ten-year bond yield can't get above 1.6%, much less 2% or even 3% that everyone fretted about 
• both McDonald's and Chipotle's have said they have increased prices (in some cases, significantly) and neither has seen a drop in number of customers;
  
• Earnings: beating expectations, 82% of companies exceeded forecasts for 3Q21.
• WTI: seems to be holding, and may hold below the point where it really hurts consumers; hard to say
• supply chain: was this over-hyped? See Ford's SUV sales; hits all-time record
• discretionary cash surging; my favorite graph 
  
• VIX: about as low as it can go; at 15 today
• EU will let inflation run 
• the US, meanwhile, is starting to taper --> brings the ten-year Treasury down
  

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Tickers

EOG: reported November 4, 2021 --

• excellent 3Q21 results;
• raises regular dividend 82%; 
• declares $2.00 special dividend
• shares: jump 3.69% after hours; up $3.35/share; trading at $94.25
• EOG; raises regular dividend 82% -- $3.00 annualized rate, so 75 cents/share; declares special dividend of $2.00 / share -- November 4, 2021; payable 12/15/21

Qualcomm: incredible

• earnings beat on record revenues; two key words: BEAT and RECORD
• signs that the supply chain crunch is easing;
• posts record sales amid demand for 5G smartphone; link here: https://www.foxbusiness.com/markets/qualcomm-posts-record-sales-amid-surging-demand-for-5g-smartphones.

WFRD:

• huge 3Q21; shares surge.

SRE: 

• will report earnings, tomorrow, Friday, November 5, 2021, before the open; 
• earnings preview;

F:

• sales improve; SUVs post best month in 21 years. Is anyone paying attention? 
• what supply chain crunch? Link here: https://www.foxbusiness.com/lifestyle/ford-sales-improve-suvs-best-month-21-years.

AAPL:

• MacBook Air drives 6.5 million Apple laptop shipments in 3Q21; link here; did someone say supply chain crunch?
• an $85,000 modified iPhone with a functional USC-C port; link here;

Becton, Dickinson:

• raises quarterly dividend to 87 cents;

Snap-on:

• raises quarterly dividend to $1.42;

DE: 

• says it's done with bargaining; the company says it has offered its best and final offer. Link to The WSJ. 
•  if the strike is prolonged, it will take the average union worker more than two years to recover.
  

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Anecdote 

I have a favorite pen. They come in packs of four at Target and I buy a four-pen pack maybe once a year or maybe a bit more often. 

Today, I went to Target to purchase a new four-pen pack. Plenty on the rack. No supply chain shortage. 

But I noted they were much less expensive than I had anticipated. They always seem so expensive. Even at Walmart where I used to get them.

So, I was surprised to see them so much less expensive than I thought they would be, and, in fact, affordable for the first time ever. LOL.

Then, I noted: only three pens in the usual four-pen pack. Didn't bother me a bit.

It's all about waste and cash flow.

On a per-pen basis, the pens were a bit more expensive, maybe as much as twenty percent, who knows. But twenty percent on a one-dollar pen is only $1.20. Over three months of use, I can handle it. LOL.

But this is the deal. When I buy a four-pack, I take one out, and put the other three in a drawer, or often in my backpack. Invariably, one gets misplaced or lost over the months. Or Sophia takes one for one-time use and lost forever. So, I pay for four, and end up using two or three. 

But even if I end up using all four, there's still the issue of cash flow. I spent less money than I expected today, and I doubt I will end up buying replacements any more often than I used to in the past.

That was anecdote #1 with regard to all that talk about inflation.

Anecdote #2 with regard to inflaiton will be about "conspicuous consumption."