In his podcast addressing the markets today Louis Navellier offered the following commentary.
If you wish to listen to this commentary, please click here.
Treasury Bond Yields Are Headed Higher
The 10-year Treasury bond yields are headed higher. It has not broken 3% but it woke up from a slumber and is headed higher. We’ve had higher bond yields in Europe in the last couple of weeks. That is why the Euro is strengthening against the dollar. And that’s why the European central bank will eventually have to go from negative to flat to positive interest rates.
Q1 2022 hedge fund letters, conferences and more
Central bankers cannot fight market rates. They can play catch up, but they can't ignore them. So, higher rates are rippling across the globe and affecting economic activity.
The Labor Department on Friday announced that 390,000 payroll jobs were created in May, which was well above economists’ consensus estimate of 328,000. The unemployment rate remained unchanged at 3.6%. Average hourly earnings in May rose 10 cents or 0.3% to $31.95 per hour. In the past 12 months, average hourly earnings rose 5.2% through May, down from a 5.5% annual pace in April. The labor force participation rate rose slightly to 62.3% in May, up from 62.2% in April. What I found notable in the May payroll report was that leisure and hospitality added 80,000 jobs, while transportation and warehousing added 47,000 jobs.
Confusing Hiring Freeze
Speaking of jobs, Elon Musk told the top managers at Tesla in an e-mail on Thursday that he has “super bad feeling” about the economy and that they needed to cut staff by about 10%. Since Musk on Tuesday demanded that all Tesla employees work at least 40 hours per week at the office and effectively cease remote working at home, it is possible that he also wanted to flush out the Tesla workers that were unwilling to go back to working at the office full-time. However, Musk’s Thursday e-mail was also titled “pause all hiring worldwide.”
Considering that Tesla has new manufacturing plants in Austin and Berlin that are not operating at full capacity, plus has a record order backlog, any hiring freeze at this time seems a bit confusing, especially after Ford announced on Thursday that it was adding 6,200 workers in Michigan, Missouri and Ohio to boost its electric vehicle (EV) production. Perhaps Tesla is continuing to have acute supply problems (especially from its Chinese suppliers), plus the high cost of lithium, nickel and cobalt for batteries may partially explain Musk’s “super bad feeling.”
Russell Realignment
News next week will be about the annual Russell realignment. They realign their indices in June. The preliminary list comes out and then each week they make a revision. We tend to benefit from the annual Russell realignment and the quarter-end window dressing.
During these oscillations, it's the time to pick up good stocks at bargain prices. I would also highly recommend that you take advantage to buy good stocks on dips. Energy, obviously, is the place to be since energy prices are going to be firm through September. Right after that are fertilizer, food, and shipping. Stocks with very strong sales earnings and providing positive guidance are doing well.
Coffee Beans
Non-fungible tokens, or NFTs, gained significant traction among certain East and Southeast Asian countries in 2021. Thailand took the lead as the country with the highest number of NFT users in the world in 2021, with a total of 5.65 million users. This was followed by Brazil with 4.99 million users and the U.S. with 3.81 million. By 2021, the NFT market had reportedly grown to more than $41 billion in value. Source: Statista. See the full story here.
