Inflation on the Climb – Closing Bull July 16th, 2021

Quick Summary:

In this week’s Closing Bull, we cover quick climbing inflation, banks crushing it in the market, Biden’s $1.9 trillion stimulus, and more.

Key News This Week:

Market recap

Banks crushing it in the Market

Delta Airlines first profitable quarter since the pandemic

Biden’s $1.9 trillion stimulus

Concerning inflation climb

End

Read the Transcript

Hi, welcome to my financial markets recap for the week. I’m John Bannan from Comhlatech.com, the stock market forecasting service.


Before we get to the news, a little update on the system, how things went this week. The last couple of days the market sold off a little bit on us so we’re in a forecast right now holding the position into next week. Certainly hoping we’ll see a recovery in Monday/Tuesday area so at the beginning of next week. That’s my expectation after these last few days have been coming down so let’s hope for the best obviously like you know, not do trading by the winner and we don’t know which one’s gonna win and which ones are not gonna win. We know generally about 8 times out of 10 if not 7 times out of 10 over the long term. So you know, it’s a pretty good track record. And we’re not that concerned when a loss comes because you know, we just closed the monster the week before last and we’re in this one, which is never a comfortable place to be right. I mean, it’s never comfortable. But even this year, we’ve been underwater and it’s come back and it’s rocked it. So certainly hoping that we’ll see some bullish behavior at the beginning of next week. So that’s my hope.


That was the system update. What was the news this week, what happened in the markets? Well, it’s earnings season, that’s really kicking off on our list. And we’ll have more next week, which again, I’m hoping will boost the market a little bit next week. As expected, companies like Goldman Sachs, Morgan Stanley absolutely crushed it. But you know, the markets not taking much notice because, you know, they’re crushing it as expected, right? That’s the genuine nature of the thing. So the bar keeps being raised by these guys, you know, the banks sure know how to make money, right? I mean, they always have, and they always will, some of them are really killing it. But they’re just not getting much love because they’re just expected to kill it. And that’s what’s happened. But one of the most notable earnings from this week was Delta Airlines. Delta posted its first profitable quarter since the pandemic hit, which is obviously good news for the business. And good news for business travel and good news for tourism to come. And hopefully, other airlines will follow suit and we’ll start to see them claiming back to where they want to be obviously, you know, being profitable, and having people back on planes and going back to tourism and traveling, etc. Right? That’s the goal for all of us. And unfortunately for Delta Airlines, it just sort of dawned on me today that their name is Delta, which is this new variant that everyone’s talking about. So I mean, the poor CEO of Delta Airlines dealing with that too, negativity around their name which they’ve had for, you know, God knows how long right? but that delta variant is here to stay by the sounds of it for a while, and it’s causing problems but we’re not going to talk about COVID in this talk, but just thought I’d point out a neat mechanic, can’t be very good for the CEO.


In other news this week as part of Biden’s $1.9 trillion stimulus that was passed in March, the US government has started sending out $300 monthly checks to parents for their children for each child, so $300 dollars extra for each child per month. This is supposed to be a one-year plan but Biden is really pushing for this to be a four-year plan so this can be around for a while, and you know this is going to be great for US parents obviously. They will get less boosts to their bottom line but also you know, not only good for the parents but it’ll be good for retailers, restaurants, and hospitality in general, I guess right? As well as retail, you know, when things were at their worst last year, everyone’s going to celebrate most companies but companies like Walmart, they were just doing great because all the stimulus checks were going to Walmart so I’m sure some of us will end up in places like Walmart and generally speaking that has been good for the economy. It’s been good for the market and what’s good for the market I’m very happy about that so let those cheques come out and we’ll see what happens after that but that’s something that’s positive for US parents obviously.


A key inflation report came out this week, consumer prices jumped 5.4% from June last year so you know, a bit concerning it’s starting to climb. We’ve been talking about inflation for a while, it’s all over the news everyone’s talking about inflation and we’re seeing it in prices of lumber and different things, we’re seeing it in gas prices and it’s really this fast pace since 2008. You know it’s really really climbing fast and you know, as the US economy gets more inflated you know the monthly consumer price index is getting attention the CPI measures the prices of about 80,000 common items that people buy and use, and there are a few gems from that report that I picked out. Bacon is now 8% more expensive than it was this time last year, which is a tragedy for people who like bacon. I was at Tim Hortons today and they ran out of bacon. And that’s not allowed. You’re not allowed to run out of bacon, right? The kids were a bit disappointed.


Anyway, hotel prices jumped 17% year on year and an even bigger one was car and truck rentals went up 88%. I mean, that is crazy. I guess it’s just less, you know, supply and demand, right? There are just less cars and they’re not buying as many cars. So there are less cars and trucks to go around. So the prices have really skyrocketed. And you know, it’s crazy crazy numbers. So hopefully that’ll come down.


Now Janet Yellen and the Fed chair Jerome Powell were out talking this week about expecting inflation to be around for a while, but not to be that particularly concerning and be a long term. It should be fairly short-lived as the market rebounds or the economy rebounds. but only time will tell. We need to see those prices, CPIs, and those consumer indexes come down before we start to see that to be true, right? And obviously, year on year is a bit of a skew. But you know, in a year’s time, we’ll know how things are running. If they’re coming down or not. We’ll take a number of months before we know if inflation is here to be around for quite some time.


So that was really the main news this week. The best of luck to ourselves and everyone involved in this particular forecast. I hate being underwater but I’ve been underwater so many times and had it turn around so I’m still expecting this to be a winner. Let’s hope for the best into next week.


So that’s it for me, it is the weekend, time to down tools. Have a great weekend everyone. Take care and bye for now.

3 Comments

  1. Mike Steel on July 17, 2021 at 9:51 pm

    Great report John. One never knows what will happen in the market. Not a great finish to this week but next week is another opportunity to make some gains. Thanks for your efforts to keep us informed and up to date.

  2. Mike Steel on July 17, 2021 at 9:52 pm

    Great report . One never knows what will happen in the market. Not a great finish to this week but next week is another opportunity to make some gains. Thanks for your efforts to keep us informed and up to date.

  3. ANDRE LINZMEYER on July 17, 2021 at 10:05 pm

    Cool
    Txs

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