Thursday, March 24, 2022

Economic Indicators -- March 24, 2022

My thoughts exactly, link here. I see neither a recession nor stagflation:

Weekly jobs unemployment claims:

  • five-decade low; lowest level since the year I graduated from high school, 1969
    • well under 200,000
    • came in at 187,000
    • expectation: 210,000
  • analyst's top concern, the meme, "the fast-spreading sub-variant of Omicron, known as BA.2"
    • or, as I would suggest, "release the kraken"

Definition of stagflation: link here --

  • high inflation rate
    • some suggest the high-water mark will be 2Q22 and then slowly drop from there
  • economic growth rate slows: 
    • of course it's going to slow; that's the Fed's hope; taking steps to slow high inflation will necessarily slow economic growth
  • unemployment remains steadily high: not yet, and no signs that will happen.

Schwab conference yesterday:

  • inflation watch
    • recently came in at 7.91% or thereabouts; I thought it was closer to 7.9%;
    • next reading could have an "8-handle"
    • Schwab's perspective: that will be the high and from then on, slowly come down;
  • they had a nice chart -- after a rate hike the market slumps -- time to normalize back to 100 on the market, after first rate hike:
    • slow tightening: six months
    • moderate tightening: six months
    • fast tightening: 24 months
    • two takeaways for me
      • six-month buying opportunity;
      • returns will definitely be less, but still "worthwhile"
  • Schwab thinks we will see a "moderate" tightening policy
  • the return on equities will be significantly slower than the last few years
  • dividend-paying portfolio now in vogue.
First group "financial / economic" indicators:

EVs:

  • Nikola has begun production of its first EV semi -- tractor for 18-wheeler.
  • factory: Coolidge, AZ
  • deliveries to begin 2Q22
  • article did not provide prices or price comparisons
  • intended for shorter routes; range of 350 miles
  • a longer-range version; hydrogen fuel cell, is on track to begin shipping next year

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