For the record, bad geopolitics, and that includes open warfare, tick me off. Just when the world settles down from a “crisis,” up pops another and there goes the price of oil, again.
- Brent crude rose to $110 a barrel on concern geopolitical tension in the Middle East may disrupt supplies.
Didn’t we just get past the Ukraine/Russia, natural gas/oil issue in east Europe? Okay, okay, I’ll calm down. It’s just that the world does not need higher gasoline prices right now, or ever for that matter.
- For a second consecutive month, U.S. Retail sales were disappointing as total sales in May rose by just +0.3%.
The only reason US retail sales are disappointing is that they did not meet the expectations of the economists polled. The fact is the numbers are up again, and the fact is they were revised higher for April; yet, the breathless media still characterizes the numbers as “disappointing.”
- May’s numbers (which are subject to revision) were again on the lackluster side and do not support the view that the economy is accelerating at a pace faster than anticipated.
Really? The retail sales numbers suggest the US economy is not accelerating “at a pace faster than anticipated.” Does that sentence even make sense? Forgetting that, should we accept the conclusion?
- Payrolls pushed past their U.S. pre-recession peak for the first time in May, the fourth consecutive month employment increased by more than 200,000, the first time that’s happened since early 2000.
On the one hand, we have US retail sales climbing fractionally in April and May and on the other, we have payrolls climbing with employment pushing past 200,000. Put both hands together and you have an economic reality – the economy may not be accelerating faster than anticipated (by whom and who cares?), but it is accelerating.
- Job openings in the U.S. climbed to an almost seven-year high in April as employers sought more workers to help manage stronger demand in the rebounding economy.
How disappointing can the retail sales be if they are large enough to 1) fill existing job openings and 2) create more job openings? In fact, how bad can the US economy be if more people are working and they are spending more money, enough so that federal income tax is on the rise and state sales tax revenue is on the rise?
- The U.S. posted a $130 billion budget deficit in May and the smallest shortfall for the first eight months of a fiscal year since 2008, as a stronger economy and rising employment bolster revenue.
One last thing … what we are seeing in the market the last two days is rebalancing and the excuse is geopolitics and the breathless media.
Trade in the day; invest in your life …
