In his Daily Market Notes report to investors, while commenting on the price of oil and bitcoin, Louis Navellier wrote:
Q3 2021 hedge fund letters, conferences and more
Gates Capital Management's ECF Value Funds have a fantastic track record. The funds (full-name Excess Cash Flow Value Funds), which invest in an event-driven equity and credit strategy, have produced a 12.6% annualised return over the past 26 years. The funds added 7.7% overall in the second half of 2022, outperforming the 3.4% return for Read More
Right on schedule, stocks are rising on the strength of early earning results, this morning by Goldman's beat of over 40% above EPS estimates. Bonds yields are grinding slightly higher - Treasuries, Investment grade corporates, and High Yield too - as concerns that inflation is more than transitory has been stated by CEOs of most major banks reporting this week.
Oil And Bitcoin Surging
Crude oil continues to move beyond $80 and Bitcoin is surging, leaving the gold behind. Even semiconductors have finally bounced. The chance to buy the dip has come & gone. Once again it wasn't as deep as more aggressive investors had hoped.
Once again stocks have been the best place to park your savings. As progress is made toward ending the pandemic, the logistics snafus are solved, and labor shortages find equilibrium, the demand boom of a full reopening should more than offset inflationary concerns and make 2022 another year where growth stocks will trump value once again as it's likely that estimates for 2023, with pandemic issues fully in the rearview mirror, will comfortably beat those for 2022.
Positive Tidbits About Inflation
The news on the inflation front looks bad, but I found many positive tidbits in the details. The Labor Department reported on Wednesday that the Consumer Price Index (CPI) rose 0.4% in September. Food prices rose 0.9% in June, while energy prices rose 1.3%. Excluding food and energy, the core CPI rose 0.2% in September. In the past 12 months, the CPI and core CPI are running at an annual pace of 5.4% and 4%, respectively.
I found it interesting that the Labor Department report shows a chart of the CPI increase for the past 13 months to illustrate that the CPI is cooling off since its June surge. Essentially, this Labor Department CPI chart was apparently designed to make the argument that inflation is largely “transitory.” Nonetheless, due to a tight labor market and higher service costs, I expect that inflation will continue to remain elevated for the foreseeable future.
Thanks to high inflation, Social Security benefits are expected to rise 5.9% in 2022, which is the highest annual increase in 40 years. This boost in Social Security benefits should help consumer spending rise next year. Inflation and the port bottlenecks are now nightly news. Although the Biden Administration will try to remind us that Social Security benefits had the largest increase in 40 years, it will be interesting if those benefits can offset the anger that consumers now have over higher food and energy prices.
Rise In Retail Sales
The Commerce Department announced on Friday that retail sales rose 0.7% in September, which was a big surprise since economists were expecting a 0.2% decline. Apparently, economists were anticipating that retail sales would decline in September due to supply shortages, but since personal income is rising, consumers continue to spend money, regardless of any shortages.
Heard & Notable
The Andersonville neighborhood in Chicago and the Chelsea neighborhood in New York ranked 2nd and 6th, respectively, as the most interesting neighborhoods in the world, according to a survey by Time Out Magazine. Norrebro in Copenhagen topped the list. Source: Statista