ELAM: A rise in negative mood as markets make new highs

Last week we noted that markets moved to new highs unsupported by positive political or international mood. Here is an update since then.

“Anyone who attempts to split any region from China will perish, with their bodies smashed and bones ground to powder,” Mr. Xi said.

Vladimir Putin said on Thursday that America’s global dominance is coming to an end, with the U.S. itself accelerating that process with a string of mistakes “typical of an empire.”

And these two autocrats for life mean what they say. Xi is targeting Hong Kong, Taiwan, and the USA in that order.

The War on Trump continues. Rudy G. loses his law license, Trump’s CFO indicted for grand larceny, and Pelosi begins investigating Jan. 6 fracas with Liz Cheney and a solid Democrat line-up. There will be no investigation of the Portland riots.

We now have a global minimum tax rate of 15%. That will be passed on to consumers worldwide.

Gamestop is 15x its value of a few months ago, but is still losing money. Ford stock is finally rallying. Toyota Tacoma sales have more than doubled since June 2020. But Team Biden wants a 50 mpg standard by 2026 for new vehicles forcing companies to make electric cars. Who is going to buy them when all we see are pickup trucks and SUVs in parking lots?

The war between the states begins anew. California has now banned state-funded travel to Texas and 10 other states. Oklahoma retaliated forbidding the same from there to California.

The big bull market began in the summer of 1982. The long drought of negativity and inflation from 1968 to 1982 had finally ended. Interest rates were declining stimulating interest in dividend paying stocks. Reagan was a popular President with a big win. That is hardly the situation now.

The government says 850,000 new jobs were created last month. Unemployment has dropped under 6%. This is good news. But rumors of a second variety of COVID may allow government meddling in our lives to continue.

Meanwhile oil has hit $75 for the first time since 2018. As noted refiners are producing less product from carbon-based oil. All the analysis of why oil cannot go to $100 is focused on supply and demand as an economic unit. But oil is a financial commodity as well. Expect prices to continue to advance.

Bond prices should be peaking now with interest rates at another low from the important low of March 2020.

Demanding electric cars now has only resulted in higher gasoline prices.

Happy Fourth of July.