Tale of the Tape
Inflation fears hit the Stock Market hard last week. After 5 Straight weeks of All-Time Highs, the Stock Market fell last week. But much like me after Thanksgiving dinner, it tried to get back up but that Food just weighs you down.
Back in Time
Those inflationary fears are affecting how people feel about the economy. My favorite economic indicator was released on Friday, the Consumer Sentiment Index. This is a survey done by the University of Michigan to find how optimistic people are about the economy. The number fell to a 10 year low.
People feel worse about the economy now than during the 2nd major Covid-19 wave we had last year.
This is something I was worried about with all the headlines sounding alarms about inflation. One of the hardest things to do is to change a narrative that has been established and reinforced in people’s minds. This is why the Fed has been so careful about what it says to the public (probably should have been a bit more clear with the use of the word inflation but then again the Fed was stuck between a rock and a hard place).
Now that every news site, blog, Twitter, YouTube channel, and TV station is blasting Inflation as a headline. People are beginning to believe it will be here and not be as transitory as we were made to believe (part of the problem is what people understand as transitory). When we get to this point, the self-fulfilling prophecy of higher inflation goes into effect because we will act based on this.
People will rush to buy things because they are afraid prices will keep climbing
Which causes supply issues (we already have major supply issues). This causes prices to go up more
Which then causes people to freak out more and rush out again to buy stuff.
So on and So On.
I am seeing this happening in myself. I want to buy a house but prices keep running away from me. So like most people, I am on the precipice of just buying the first one that comes available. Even though I know that is a horrible idea.
Here is a crazy stat for you to consider: Houses from June 2020 to June 2021 have on average only stayed on the market for 1 week. A record low from data going back to 1989.
According to the Wall Street Journal “American homebuyers are having to pounce faster than ever to clinch a deal, forcing many of them to make snap decisions about what house to purchase”
How you and I feel either make or breaks what happens in the economy. As I always say, we are emotional creatures. So we act based on our emotions not on rational thought. So it pains me when I see so much capitalization on people’s fear because it has much worse circumstances down the line.
BUT
on the other hand, people are leaving jobs at a historic pace. The quits rate is now at 3%. After another 4 million people quit their job in September. Breaking the record in August. So it’s interesting that on one hand, people believe the labor market is strong enough that they can find another job if they quit. But not strong enough to be able to cover all their needs as far as pay is concerned. Also interesting, the industry with the highest rate of quits is in food and leisure. Which has been the Derrick Henry of the Labor Market employment recovery this year. But I guess like King Henry, the labor market is going on IR (Get well soon My Lord).
Season of Break-Ups
According to Hallmark and every Netflix movie that will be released in the next two months. The Holidays are supposed to be a season of love and togetherness. Not a season of break-ups and split-ups. But apparently, conglomerates did not get that memo. GE, J&J, Toshiba all announced major breakups of their business units.
GE kicked things off on Monday announcing that, unlike most dudes’ entire personal care products. It would break into 3 separate companies. (Seriously guys we need to follow GE on this one and STOP using those 3-in-1 shampoos, conditioner, and body washes combo).
Then Toshiba not wanting to be left out of the party announced their breakup on Thursday. It is also doing a 1 to 3 split (GUYS this is a sign for your self-care routine to be updated)
Then on Friday, J&J was like we want in too. But they only did a 1 for 2 special. I guess each company gets to keep a “J” (ba-dump-tss)
I made a skit about the J&J break-up
Looking into my 🔮
This week it will be all about Retail with companies like Walmart, Target, and Home Depot reporting earnings this week. As these stores are used by all of us for most of our purchases. We will get great insight into consumer trends, especially for the holiday season.
It is estimated that holiday spending will be one for the record books. According to National Retail Federation, you and I are gonna shell out between $843 and $859 billion this holiday season. Last year, holiday spending came in at $777 billion. The average growth of holiday sales had been just 4.4% but with the advent of a little company called, Amazon. Online shopping has inspired us to get into the spirit a little bit more. NRF is expecting a jump in online sales from $196 billion last year to $226 billion this year. So my question for you guys is what is going to be your largest holiday expense, email me at ramblingmindshow@gmail.com or comment below or hit me on IG or Twitter. And share it with me.
No Sport Update
Soccer is on International Break in preparation for World Cup 2022. So technically Man U won since they didn’t play at all.
Moral Victories count!
Thank you for reading
I hope you all have A WONDERFUL week. I will see you back here on Wednesday for another post. In the meantime, Go subscribe to Rambling Mind Podcast for mid-week stock market updates. You can also catch me on TikTok, Instagram, and YouTube every day.
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Remember GENEROSITY > greed
God bless Each and Everyone of y’all
✌🏾
-Kelechi