Daily Economic Update: July 1, 2024

"Success is not achieved by chance but through careful evaluation and timely adjustments. Just as a coach makes strategic changes at halftime, businesses and individuals must assess and recalibrate at the midpoint to ensure they hit their annual targets. It's the difference between merely hoping for success and actively engineering it."  (Not sure who to attibute this to, but it seemed fitting for the halfway point of the year. )

The beauty (or curse) of posting is daily is you can go back through everything from the start of the year.  In doing so and see all the things that everyone thought were so important, all the things we've already forgotten and perhaps just how much of the daily news is just noise.   I'm not saying any of the below were important or that we've forgotten all of these, some are timeless, but here are some unofficial 1H2024 highlights:

January:

• 7 rate cuts for 2024 
• Abercrombie and Fitch stock rally
• 10Y over 4%
• Boeing doors ripping open mid-flight 
• Japanese stocks hitting 34 year highs
• BTC ETF's
• China Evergrande is Bankrupt (finally)
• Liz Warren hates Jay Powell
• Will Taylor Swift make it to the Super Bowl from Japan?

Feb:

• Powell on 60 Minutes
• Where is the neutral rate?
• Walmart pulls Snoop Dogg's cereal
• Red Sea crisis
• Bill Ackman = Billionaire Activist Man
• Some report of a "serious national security threat" that we all forgot about
• AI Hype
• VisionPro while driving a CyberTruck
• Blowout jobs report
• BOXX etf
• Buffett's annual letter: "instinctively knowing that pundits should always be ignored" and "Never risk permanent loss of capital" - you will be rewarded if you make a couple of good decisions during your lifetime and avoid serious mistakes. "
• Data Dependent

Mar:

• There are no bubbles
• Dog Wif Hat, Frog Wif Hat, Retardio
• r-star
• Chinese Ev's
• NYCB
• John Kennedy from Louisiana questions Powell about sexual misconduct by the FDIC
• Data Dependent
• Inflation data worse than expected
• Shoei's interpretator
• Ozempic
• Reddit IPO
• Francis Scott Key collapse
• Waller, "There's still no rush"
• Kahneman dies

Apr:

• Dollar Strength
• Fed may not cut this year
• Jobs data crushes
• Earthquake
• Eclipse
• Student Loan Forgiveness
• The end of Curb
• 2Y at 5%
• Shelter and motor vehicle insurance
• r-star
• Bitcoin "halving"
• "hawkish pivot"
• tents on city streets and campuses
• Ban Tik-Tok and Noncompetes
• stagflation
• deficits

May

• Drake and Kendrick Lamar
• Peloton layoffs
• Bidenomics gets an "F" from Druck
• GameStop and "Roaring Kitty"
• $1,000 Beef Cases in Vegas
• Jamie Dimon still sees a lot of inflationary forces in front of us
• Bernanke and Blanchard believe people need to lose their jobs for inflation to fall
• China property market bailout
• Everyone's an equity bull, including Mike Wilson at ATH's
• Uncertainty about the degree of restrictiveness
• The Yen, the Yuan
• More questions around R-Star (see Waller)
• CRE (really an all year thing)

June

• Elections (Mex, France, UK, etc.)
• Rate Cuts (ECB, Canada, etc.)
• Divergence
• June 12th, the most important Wednesday in history, CPI and FOMC
• Electric boats and sharks “Do I stay on top of the boat and get electrocuted, or do I jump over by the shark and not get electrocuted?” 
• Hawk Tauh
• Grooming
• Presidential Debate - Biden nomination and election odds

Lot's of rumors that Biden is preparing to drop out and pointing to Harris as the Dem nominee.

Following the U.S. Presidential Debate and France's first round of election, the Ray Dalio essay "Pick a side, fight, or flee" might be required summer reading irrespective of where you are on the political spectrum.   

Friday's PCE report was largely in-line with consensus estimates with the personal income numbers coming in slightly above estimates.  UofM consumer sentiment was stronger than expected with year ahead and 5 year ahead inflation expectations declining slightly but still at 3%.  Yields finished the day higher and----quick mid-year recap

The week ahead is a weird one from a timing of economic data.  You get an early market close on Wednesday, July 3rd, a full close on the 4th and then Friday features the Jobs Report.

Monday: ISM Mfg

Tuesday: Powell 930am, JOLTS

Wednesday: ISM Services, Fedspeak, FOMC Minutes at 2pm (SIFMA Close at 2pm and Stocks Close at 1pm)
Thurday:  Celebrate U.S. Independence by watching the UK vote

Friday: Jobs Day in 'merica

XTOD: A Majority of U.S. Military Bases under United States European Command (EUCOM) in Spain, Germany, Italy, Bulgaria, Poland, and Romania have now been placed on Heightened Alert, with their Force Protection Condition (FPCON) being raised to Charlie, the Reason is still Unknown.

XTOD: Here's a Biden update from http://BillOReilly.com news headquarters.  The decision has been made that the President will quit the campaign.  Two reasons: Democrat internal polling says he cannot recover from the debate, and fundraising is drying up. (1/2)

XTOD: "The Party told you to reject the evidence of your eyes and ears. It was their final, most essential command."  -- George Orwell

XTOD: France has just confirmed my worst fears. Both extremes of the political spectrum are on the rise in Europe once again. France is just the litmus.   France’s snap election, first round: the center didn’t hold. 

Le Pen: 260-310

Left: 115-145

Macron: 90-120

XTOD: “Do not put faith in constant happiness, and fear most when all smiles upon you”

If life is about developing a virtuous and just spirit, then good fortune is a distraction...

Success can deceive us; we mistake worldly praise as virtue, and forget Goodness altogether

https://x.com/sentdefender/status/1807488483503546716

https://x.com/BillOReilly/status/1807457358794109407

https://x.com/BillKristol/status/1807372222790520846

https://x.com/vtchakarova/status/1807500835422982148

https://x.com/SeanBerube4/status/1806718181416792536