Ok–so the UAW has implemented targeted strikes today at 3 auto plants in the U.S.–honestly as expected. Are markets riled – no, of course not–equities are higher. Just like so many things the strike was expected by all–no one–I mean NO ONE thought the gap in what the UAW was demanding and what was offered could be closed so we don’t have giant negative reactions. We’ll see where this one goes–I suspect it will just be an economic sideshow for a few weeks–longer term who knows.
I see that west Texas intermediate is over $90/barrel today–ouch! This WILL flow through the economy and help move inflation higher (or at least stop the lowering of inflation). I mentioned that gasoline was over $4/gallon in Minnesota–related to refinery outages, but as crude keeps increasing the odds that we will see very sticky prices at these levels grows. As is typical for these situations the ‘haves’ keep right on driving while the ‘have nots’ will be hurt.
After a couple days of flirting with the 4.30% level on the 10 year treasury it is trading at 4.33% this morning. The inflation numbers this week weren’t taken very seriously by equity investors –both consumer and producer prices were hotter than forecast. The CME Fedwatch tool still shows odds of a ‘skip’ in interest rate hikes by the FOMC next week–I would think more skeptics of this position would show up–but that isn’t the case as the FED has once again boxed themselves into a corner by shooting off there collective mouths. There have been many of the FED officials sending the message that skip is the right way to go–so now to hike would send markets in a tailspin.
Well I haven’t done anything this week–no buying or selling, but today is 9/15/2023 which means the fruits of our labor show up in brokerage accounts–dividends and interest. It is fairly gratifying to be virtually fully invested and collect very tasty payments especially in the months of March, June, September and December.