50 Years Off the Gold Standard

I was in college when Nixon took us off the long admired gold standard and it has been a subject of controversy ever since. So many traditional conservatives argued it would be a disaster for the dollar to no longer be backed by gold. But much to my surprise, my econ professors in both college and grad school argued that it was the best thing that Nixon or any president had ever done, namely because the gold standard was artificial and by going off it, the dollar was now based on something real -- wages and prices -- and it was an argument that stuck and has been proven to be correct.  

Dow, S&P close at records as Disney offsets drop in sentiment

‘Twas a pretty flat day overall but still, with all three major indexes closing ever so slightly in the black, it made for another record setting day for the S&P and Dow. The bad news today was a dent in consumer optimism as reported by the University of Michigan showing it at its lowest level in a decade and attributed to consumer COVID fatigue brought on by the Delta variant. But the objective data shows the consumer is in great shape and, as today’s expert says, “healthy enough to spend and kind of keep the economy afloat.” But overall, good news abounds. 

S&P 500, Dow set fresh records as recovery marches forward

Though the Dow spent the morning almost 150 points in the red but did recover to end the session ever so slightly in the black, the Nasdaq and S&P fared considerably better as investors flocked back to tech to pick up bargains after being down for a week. But with the Dow and S&P already at records, the slight increases put them at still new records and, as today’s expert put it, “for good reasons.”  “The fundamental backdrop is supportive of higher equity prices” with Q2 going great, interest rates low and inflation under control. 

Slowing inflation growth lifts Dow, S&P to records

Still another day where there are new records for the Dow and S&P, spurred on by reports that inflation is getting under control. This time the Fed is sending signals that stimulus tapering may be in the works soon and that an announcement could come as early as next month. Cyclical stocks were again the best performing while the $1T infrastructure package is still being hailed, the 3.5T supplemental package decidedly less so. At 8.6 billion, volume remains below average.  

Dow, S&P 500 hit records as infrastructure bill passes Senate

With the unprecedented and decades overdue infrastructure package passing the Senate, promising lots of added support for the recovery, the Dow and S&P were once again pushed into records with the markets approving of this bill and very much betting against the much more ambitious bill not making it through the House.  Once again the cyclical stocks were the top performers and growth took a holiday. Inflation will remain a key issue and the reports this week will be watched carefully.  Volume again came in below average at just under 9 billion. 

S&P dips, just off record as energy shares fall

There was a modest pullback on the Dow and S&P today as the market did its usual tug of war between inflation fears and recovery optimism, muddled of course by the Delta surge. But today at least it appeared that bond yields might be normalizing and that was cause for celebration by the rate-sensitive cyclicals.  But there will be more watching of inflation readings this week and confusion was further stoked by conflicting Fed statements. Atlanta prez Ralph Bostic said we’re still a long way from raising rates while Richmond prez Tom Barkin said we were ready now for an increase.  This has further highlighted the importance of the Jackson Hole meeting later this month. Expected Q2 profit growth today stands at 91% with 443 companies having reported and 87.4% beating estimates. Volume was below average at 8.5 billion. 

Upgraded Stocks to Buy in August

To start everyone's week off on what is supposed to be a very hot week, I thought I'd offer the latest list of hot stocks for August as given this week by U.S. News Invested.  There are only a couple names here that I recognize ... and that may be a good thing.  Hope everyone had a great weekend.  And try to stay cool until Friday when this heat wave will supposedly break.