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The Morning Call--Ooops, Part 2: The Fed Is Now Failing On Both Primary Mandates

May 12, 2021 9:10 AM ETADP, CMI, MMM, TROW
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The Morning Call


The Market


Yesterday was a tough trading day. However, (1) neither the DJIA nor the S&P challenged any support level and (2) they both experienced gap down opens---which will need to be filled before any lengthy decline can begin. In short, it was one day. Follow through.

Tuesday in the charts.

Big-Tech Bloodbath Continues After Biggest Sell-Program In History



The Economy


Weekly mortgage applications rose 2.1% while purchase applications were up 0.8%

Month to date retail chains store sales grew less rapidly than the prior week.

The March JOLTS report showed job openings totaled 8.1 million versus estimates of 7.5 million.

April CPI came in at +0.8% versus forecasts of +0.2%; core CPI was up 0.9% versus 0.3%. This means that the Fed is now failing on both its primary tasks: employment high, inflation low. I tol’ you.

US Core Consumer Prices Explode Higher At Fastest Pace Since 1981


March Japanese flash leading economic indicators were 103.2 versus 98.9 recorded in February.

March EU industrial production was up 0.1% versus consensus of +0.7%.

The March UK trade balance was L-2.0 billion versus L-0.9 billion in February; March industrial production was +1.8% versus +1.0%; March GDP was up 2.1% versus +1.3%; Q1 GDP was -1.5% versus -1.6%; Q1 business investment was down 11.9% versus up 5.9% in the prior quarter.

April German CPI was +0.7%, in line.


The Fed

The Fed abandons long held inflation policy.

The Fed does a quiet about-face on inflation

Jim Grant: the Fed can’t control inflation.

Jim Grant: The Fed Can't Control Inflation

Biden’s Plan

Weak jobs report shows limits of stimulus.

Weak Jobs Report Shows Limits of 'Stimulus' | National Review


It is just starting.

Inflation: It's Just the Start

The coronavirus

This is a great seven minute video excerpt from a TEDx presentation on the negative psychological impact of the virus on our decision making process. (must watch).


Bottom line.

What can you do about high valuations?

What Can You Do About High Valuations? - Compound Advisors

For those who missed Stan Druckenmiller’s Squawk Box appearance.

"We're In A Raging Mania" - Druckenmiller Warns "Fed Is Endangering Dollar Reserve Status"

The psychology of QE.

The Psychology Of QE Is Far More Important Than The Amount Of It

News on Stocks in Our Portfolios

T. Rowe Price (NASDAQ:TROW) declares $1.08/share quarterly dividend, in line with previous.

Cummins (NYSE:CMI) declares $1.35/share quarterly dividend, in line with previous.

3M (NYSE:MMM) declares $1.48/share quarterly dividend, in line with previous.

ADP (NASDAQ:ADP) has priced public offering of $1B of its 1.70% senior notes due 2028.

What I am reading today

Three social security myths.

Don't believe everything you hear: 3 Social Security myths that could ruin your retirement

The next natural disaster is on the way and we are not prepared.


The world’s largest emitters of carbon dioxide.

Political Calculations: The World's Largest Emitter of Carbon Dioxide

It has never been harder to be an MLB hitter.

All the Reasons Why It Has Never Been Harder to Be an MLB Hitter

Quote of the day.

Quotation of the Day...

Mediterranean diet may protect brain from Alzheimer’s.

​​​​​​​Mediterranean Diet May "Protect" Brain From Alzheimer's Disease, Study Says

Visit Investing for Survival’s website (Home | Investing for Survival | Investingforsurvival.com) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

Analyst's Disclosure: I am/we are long adp, cmi, mmm, TROW.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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