By Bill Hornbarger, Chief Investment Officer
Three Things to Watch
- Earnings will be the focus this week with a diverse set of companies scheduled to report. Big names on the calendar include Netflix, Coke, Verizon, and Abbot Labs among others. Earnings are expected to be up 65% to 70% over last year’s Covid depressed second quarter.
- The yield on the 10-year U.S. Treasury is in focus. Since peaking at 1.74% in late March it has declined and closed last week at 1.27%. This is despite better economic news and significantly higher inflation. The decline in yields has been a surprise to just about everyone, and market participants are wondering if it is signaling more difficult days ahead.
- It’s a quiet week for economic data with mostly second tier data and no inflation readings. The highlights are housing starts and existing home sales, expected up 1.2% and 1.7% respectively, and leading economic indicators are expected to increase 0.8%, which would be the 13th consecutive positive reading.
Three Things to Know
- There are expected to be more than $1.0 trillion of stock buybacks in the S&P 500 this year – more than all the annual coupon income in the US Treasury, investment grade and high yield markets combined. (Source: The Long View, @HayekandKeynes)
- The dollar has lost 50% of its purchasing power in the last 30 years. For comparison, Bitcoin has lost 50% of its purchasing power in just the last 3 months. (Source: Joe Weisenthal, @TheStalwart)
- After peaking at $1,686 in early May, lumber futures are now trading at $490 (random length lumber futures which specifies 110,000 board feet). (Source: Bloomberg)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.