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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: The Ox who wrote (19679)	8/14/2017 2:55:22 AM
From: John Pitera	3 Recommendations Recommended By 3bar roguedolphin The Ox Read Replies (1) \| Respond to of 33421

The United States1. Let’s begin with the CPI report which provided further confirmation that US inflation remains subdued. Below we have the headline and the core (ex. food and energy) CPI (“Survey” indicates economists’ forecast). Here are some observations from the CPI release. • The sub-sector breakdown shows a shrinking contribution from energy. Source: @IIF, @josephncohen • Shelter inflation (including rent), which has been the primary driver of the US core CPI is coming off the post-recession highs (but remains above 3%). • Deflation in used cars persists due to scores of vehicles coming off lease. • A robust supply of used cars is putting pressure on new vehicle inflation, which has turned negative last month. In fact, *new car prices are now declining at the fastest pace since the recession. • Cellular services remain a drag on inflation. Here is the impact of the communications sector on the headline CPI. Source: Piper Jaffray & Co. • After a sharp spike a year ago, medical care inflation is back near 2.5%. • Hotels are cutting prices faster than at any time since 2010. • Finally, education inflation continues to trend lower. Here is a longer-dated chart of education cost increases based on the PCE measure (rather than the CPI). Source: Goldman Sachs, @joshdigga ---------------------------------------------------------------------------- 4. This chart shows the ( look at the negative blowout in productivity growth og computer and electronic* *products.)* 5. The Oxford Economics Global Risk Survey says that investors increasingly see Policy errors in the US as a *almost 40% chance of creating a global recession.... amazingly high number....* Source: @sflivermore, @OxfordEconomics THE US BUCK... 3. Hedge funds and other speculative accounts continue to raise their bets on a further appreciation in the euro. Since we are on the topic of currencies, speculative accounts are also betting on the Canadian dollar. The combination of the two trends above has created the biggest bet against the US dollar in years. When September and Oct come.... with the USD under trading assault... Tax Reform is tremendous unwieldy beast with so many splint groups not wanting to write blank cehecks for tax reform.. especially if there is not an agreement to nailed down the growth curve projection in ACA costs. (Health Care)..... what is going to be the fall out with the debilitating congress's ability to come up with a cogent and mathematically balanced Tax Reform plan? And How do you get the fiscal conservatives, the tea party members..... Rand Paul etc. of the Republican senate who have expressed and unwilling to write a blank check for unlimited Debt ceiling increases. If we have other aspects of a US dollar crisis and Bitcoin is doing a great job of joining gold as a way of voting with your money out of USD assets...... this seems like a potential slow motion wreck for US equities to get a 20-25% BRUISING........ after all if other global asset markets are showing growth and their currencies are showing capital appreciation..money managers have fiduciary responsibility to not sit in High PE company in the US which may just appear to be in a quagmire with DJT looking increasingly like he may not serve out his full term. This would actually be an analogue of sorts of the 1973-1974. Environment. Except no oil shock and , no synchronized global recession. JP