Market Mania Watch:
June 2 – Bloomberg
(Katherine Greifeld and Vildana Hajric):
“Retail traders are storming back into the options market as meme stocks soar. Trades involving 10 contracts or fewer are rising as a percentage of overall equity-call volume, according to the Options Clearing Corp. Such small lots suggest that individual traders are behind the buying, according to Susquehanna International Group… Such a feedback loop may already be at work in AMC Entertainment Holdings Inc., which has soared more than 2,000% this year. A record 2.4 million calls were purchased on Friday, beating the previous day’s all-time high.”
Inflation Watch:
June 1 – Washington Post
(Abha Bhattarai):
“Consumers are paying more for a growing range of household staples in ways that don't show up on receipts - thinner rolls, lighter bags, smaller cans - as companies look to offset rising labor and materials costs without scaring off customers. It's a form of retail camouflage known as ‘shrinkflation,’ and economists and consumer advocates who track packaging expect it to become more pronounced as inflation ratchets up, taking hold of such everyday items such as paper towels, potato chips and diapers. ‘Consumers check the price every time they buy, but they don't check the net weight,’ said Edgar Dworsky, a consumer advocate and former assistant attorney general in Massachusetts, who has been tracking product sizes for more than 30 years. ‘When the price of raw materials, like coffee beans or paper pulp goes up, manufacturers are faced with a choice: Do we raise the price knowing consumers will see it and grumble about it? Or do we give them a little bit less and accomplish the same thing? Often it’s easier to do the latter.’”
June 2 – Wall Street Journal
(Paul Hannon):
“Consumer prices across the rich world rose at the fastest pace in more than 12 years during April, as central bankers try to figure out whether shortages that have emerged as the global economy reopens will prove transitory or have long-lasting consequences. The Organization for Economic Cooperation and Development… said consumer prices in its 36 members, which are mostly rich countries, were 3.3% higher than in April 2020. That was the largest increase since October 2008. Across the Group of 20 leading economies… the annual rate of inflation rose to 3.8% from 3.1% in March, reaching its highest level in over a year.”
June 3 – Financial Times
(Emiko Terazono and Judith Evans):
“Global food prices have surged by the biggest margin in a decade, as one closely watched index jumped 40% in May, heightening fears that the inflation initially stoked by pandemic disruption was accelerating. The year-on-year rise in the UN Food and Agriculture Organization’s monthly index was the largest jump since 2011... The higher inflation will hit poorer countries reliant on imports for staple goods. For richer countries, the cost of raw ingredients accounts for only part of the overall price paid for products at supermarkets and restaurants. However, the rise in raw material prices has been so steep that big companies such as Nestlé and Coca-Cola have said they would pass on any increases.”
June 3 – Financial Times
(James Politi and Colby Smith):
“Last month it took Carey Cherner, a 36-year-old used car dealer in Kensington, Maryland, less than 12 hours to sell a 2001 Ford F-150 pick-up truck with 184,000 miles on the clock. It went for $7,500 — 50% higher than usual. Cherner’s experience was not a one-off in the US used car market, where prices are rising rapidly. The industry is at the heart of the country’s growing inflationary pressures — and has therefore become a subject of great interest to policymakers in Washington. ‘There’s more people buying cars than there are cars in the market, which makes it go kind of crazy,’ Cherner said.”
U.S. Bubble Watch:
June 3 – CNBC
(Jeff Cox):
“Private job growth for May accelerated at its fastest pace in nearly a year as companies hired 978,000 workers, according to… ADP. It was a big jump from April’s 654,000 and the largest gain since the 4.35 million added in June 2020 as the national economy came out of its Covid-19 lockdown. Economists… had been looking for 680,000 in May. The April total was revised sharply lower from the initially reported 742,000.”
June 3 – Reuters
(Lucia Mutikani):
“The number of Americans filing new claims for unemployment benefits dropped below 400,000 last week for the first time since the COVID-19 pandemic started more than a year ago, pointing to strengthening labor market conditions.”
June 2 – CNBC
(Diana Olick):
“High prices and low supply are finally taking some of the heat out of the housing market. Even with interest rates falling slightly, mortgage application volume fell 4% last week from the previous week, according to the Mortgage Bankers Association’s… index. It fell to the lowest level since February 2020… Applications for a mortgage to purchase a home fell 3% for the week and were 2% lower than a year ago. This is the second straight week that purchase demand was lower than a year earlier, even though mortgage rates are still lower.”
June 2 – Bloomberg
(Prashant Gopal):
“Luxury home sales in the U.S. are soaring faster than lower-cost segments as remote work, brimming stock portfolios and rising listings give wealthy buyers an edge. In the three months through April, purchases of high-end homes increased 26% from a year earlier, according to… Redfin. Sales of the most-affordable properties -- in high demand by first-time buyers, downsizers and property investors alike -- rose 18%. Mid-priced homes gained 15%.”
China Watch:
May 31 – Reuters:
“China's factory activity expanded at the fastest pace this year in May as domestic and export demand picked up, though sharp rises in raw material prices and strains in supply chains crimped some companies' production, a business survey showed… The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) rose to 52.0 last month, the highest level since December… New orders rose at the strongest pace so far this year and a gauge for export orders was the highest since November, but the output reading, while still solid, was slightly lower than the previous month.”
Global Bubble Watch:
May 31 – Bloomberg
(Sam Kim):
“South Korea’s exports surged the most since 1988 in May as a reopening of overseas economies boosted demand for products manufactured by the Asian nation. Overseas shipments increased 45.6% from the pandemic-driven plunge a year earlier… Exports to China rose 22.7% while total semiconductor shipments increased 24.5%.”
Europe Watch:
June 1 – Reuters:
“Euro zone manufacturing activity expanded at a record pace in May, according to a survey… which suggested growth would have been even faster without supply bottlenecks that have led to an unprecedented rise in input costs… IHS Markit's final Manufacturing Purchasing Managers' Index (PMI) rose to 63.1 in May from April's 62.9… and the highest reading since the survey began in June 1997. An index measuring output… eased from April's 63.2 to 62.2.”
Emerging Markets Watch:
June 2 – Wall Street Journal
(Greg Ip):
“Latin America, which led developing nations in adopting a market-friendly model of economic development, may now be leading them away from it. On Sunday, voters in Peru could elect as president Pedro Castillo, leader of a Marxist party that seeks to nationalize foreign-owned mines, invokes Lenin and Fidel Castro, and questions democratic institutions such as a free press. On the same day, Mexicans will decide how much control over Congress to give their leftist president, Andrés Manuel López Obrador. Since taking office in 2018, he has expanded state control of oil, gas and electricity while undercutting the independence of the judiciary. And just weeks ago, Chileans elected a far-left slate of delegates to rewrite their constitution. A leftist already governs Argentina and polls suggest one could win Brazil’s presidential election next year.”
Cybersecurity Watch:
June 1 – Bloomberg
(Mike Dorning,
Fabiana Batista
and Michael Hirtzer):
“JBS SA, the largest meat producer globally, has made ‘significant progress’ to resolve the cyberattack that impacted its global operations and will have the ‘vast majority’ of its plants operational on Wednesday. ‘Our systems are coming back online and we are not sparing any resources to fight this threat’” JBS USA Chief Executive Officer Andre Nogueira said… The cyberattack forced the shutdown of all of JBS’s U.S. beef plants -- facilities that account for almost a quarter of American supplies…”
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