It’s all about energy, financials, materials, and industrials, which have come on strong, as the growth selloff has seen communication services and technology slip further into the pack.
Kind of reminds me of the story of the tortoise and the hare.
To see the chart, click here, and here.
Bracing for another volatile week where investors have to crunch more numbers than normal and will be in the dark on key issues of the day.
Demand has materialized and supply isn’t there. One has to wonder why businesses have been so flatfooted. There is no doubt the uneven recovery that saw US demand pop before the rest of the world skewed the flow of containers and sent cost up on everything involving global shipping and raw materials needs.
The Baltic Dry Bulk Index is at its highest level in more than a decade.
Watch the Fear Index (VIX), which declined 32% on Friday to 19 and is edging a little higher this morning.
VIX
Today’s Session
The deal of the day has Discovery (DISCA) buying Warner Media assets from AT&T (T) that will create a new competition to Netflix (NFLX) and Disney (DIS). This could spark smaller deals but underscores the notion of having supply to meet demand. Interestingly, Discovery shares traded much higher earlier in the year on speculation they would be bought or maybe end up with a different partner.
Demand Continues… So Does Price Inflation
The Empire State Manufacturing Survey came in above consensus with healthy reads on new orders and shipments. Inventories slide and prices paid, and prices received, hit all time high levels.
Empire Fed Manufacturing Survey | May | Apr |
Headline | 24.3 | 26.3 |
New Orders | 28.9 | 26.9 |
Shipments | 29.7 | 25.0 |
Inventories | 7.1 | 11.6 |
Prices Paid | 83.5 | 74.7 |
Prices Received | 37.1 | 34.9 |
Empire State Fed Manufacturing Survey
To see the chart, click here.
It's not just the data but companies are talking up inflation as well.
Portfolio Approach
We added to Consumer Discretionary and Technology on Friday in our Hotline Model Portfolio.
