Thursday, November 4, 2021

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

WFRD:

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."  

2 comments:

  1. Here is another aspect of this trend that I don't see many talking about: You paid for a package of pens that contained 25% less product. However, the amount of resources that went into the packaging was probably nearly identical to the old package that contained more product. I presume that 100% of the packaging was discarded (landfilled) or turned over for recycling. What does the climate change cult have to say about that?

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    1. You are absolutely correct. I was going to mention that and then got distracted. The package was almost identical in size as far as I could tell. You are so correct. I'll get back to this later; I have thoughts on this one.

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