Summary and Comment The debt ceiling saga continues, but this Saturday there have been some positive developments. Biden calls tentative agreement ‘an important step forward’ but deal still needs to receive approval from a divided Congress. More to come in the next couple of days. Core PCE prices in the US, which exclude food and energy, rose by 0.4% month-over-month in April, above market expectations of 0.3%. Personal spending continues to rise more than expected. The inflation fight is not over. The University of Michigan consumer sentiment for the US was revised higher to 59.2 in May of 2023 (from an initial estimate of 57.7), but remained the lowest level in six months, amid worries about the path of the economy. GDP growth rate, MoM, was -0.3%. This is the second consecutive negative GDP print, which many would call a technical recession. Thus, the outlook for the European economy is not very bright. For the week, big cap tech stocks ended in the green, with the the NASDAQ up 3...

Summary and Comment The debt ceiling news are getting more intense as the June deadline approaches. No agreement in sight yet... Retail sales and building permits flatten, signaling a slowing economy. Some real estate markets are also starting to cool down. Unfortunately, this week, Sam Zell, the billionaire investor who called himself “the Grave Dancer” for his bets on distressed assets, has died at 81. Samuel Zell was born Shmuel Zielonka in Chicago on Sept. 28, 1941. His parents were Jews who had escaped the Nazi invasion of Poland and made their way to the US through Japan in 1941. Ken Moelis, the founder of investment bank Moelis & Co., said Zell “was brilliant, uniquely insightful and a person who truly enjoyed what he did.” For the week, stock markets are in the green, with the S&P500 up 1.6 %, the NASDAQ up 3.5 %, and the RUSSEL 2000 up 1.9 %. Gold is down 1.7 % and silver is down 0.4 %. The barrel of WTI rised 2.2 % for the week. Natural gas recovered significantly...

Summary and Comment The University of Michigan consumer sentiment for the US fell to a six-month low of 57.7 in May of 2023. " While current incoming macroeconomic data show no sign of recession, consumers’ worries about the economy escalated in May alongside the proliferation of negative news about the economy, including the debt crisis standoff ", Surveys of Consumers Director Joanne Hsu said. The year-ahead inflation expectations receded slightly to 4.5%. The inflation rate in the US was 4.9% YoY and 0.4% MoM, while the producer price inflation (PPI) increased 0.2% MoM. It seems inflation is moderating at a slower pace, while the economy is cooling. Will this end up in a stagflation scenario? For the week, stock markets are mixed, with the S&P500 down 0.3 %, the NASDAQ up 0.6 %, and the RUSSEL 2000 down 1.1 %. Gold is down 0.3 % and silver is down  6.6 %. The barrel of WTI dropped 1.4 % for the week. Natural gas recovered significantly (+6.4 %). The relative stre...

Weekly Market News and Comments   " The second and third biggest bank failures in US history have followed in quick succession. The US Treasury and Federal Reserve would like us to believe that they are “idiosyncratic”. That is a dangerous evasion. Almost half of America’s 4,800 banks are already burning through their capital buffers. They may not have to mark all losses to market under US accounting rules but that does not make them solvent. Somebody will take those losses. " It is clear at this moment that the central banks are trying to keep the banks from crumbling, while (pretending that) they are fighting inflation with high interest rates. The FED and the ECB raised reference interest rates by 25 bps, but a pause will likely happen soon. In a year from now, rates will be decreasing. Injections of capital to the banks (one way or another) will happen in the meanwhile, no doubt. Let's see how much the economy slows down in the process - it's a matter of waiting a...

Summary and Comment This week, First Republic Bank failed and was sold to one of the US Big Banks. The banking system consolidation is ongoing. Is there going to be a credit crisis? Maybe. Keep some cash on hand, in case of a market crash (so that you can buy cheap stuff!!!). Regarding economic indicators, the US GDP growth rate estimates (~1%) were lower than expected. Personal spending is flat, and income grew ~0.3% MoM. In France and Germany, inflation estimates (YoY) are at 5.9% and 7.2%, respectively. Core PCE prices in the US, which exclude food and energy, rose by 0.3% month-over-month in March of 2023, the same pace as the prior month and in line with market expectations. The annual Core PCE, the Federal Reserve's preferred gauge to measure inflation, slowed down to 4.6%, slightly above market expectations of 4.5% but equaling the 13-month low from December 2022. For the week, stock markets are up, led by the tech stocks (NASDAQ up 1.9%). SPX is up ~0.8%, while the RUSSEL ...