I have had somewhat of a morbid fascination trying to ascertain the impact of sanctions on the Russian economy and everyday life. Information hasn’t been that easy to come by. The most public evidence that Russia has been holding up comes from still robust revenues from energy exports and the surprising strength of the ruble.
Last week the Fed raised short-term interest rates by 0.75%. This was entirely expected by the market. Given that this was already priced in, it stands to reason that the only source of new information would be what the Fed would communicate in its statement that’s released in conjunction with announcing the interest rate hike along with Chairman Jay Powell’s press conference.
I have a great-nephew that is about to turn one in July and he and his parents, my niece and her husband, live in the Bay Area. They came down to Orange County to stay with their parents (my sister-in-law and brother-in-law) for Father’s Day weekend.
I have always been fascinated by economic cycles. What I have learned over the years is that financial excesses that reverse into fear and revulsion are often catalysts for economic downturns. Real estate, commercial and/or residential, are often culprits because they are assets that can be leveraged which can magnify returns as well as often being influenced by tax advantages which can stimulate demand beyond its longer-term trend.
Last week was brutal for retailers as major earnings announcements showed how they have been hit very hard by huge cost increases. Wal-Mart started the week off shocking the market with its very weak earnings outlook and then there was Target.
Its stock price got absolutely crushed in the wake of its results being released.
Last week was very busy as I was in Austin for most of it to attend and present at our first company national meeting since 2019. The trip also included participating in two advisory board meetings. In order to meet my weekly blog commitment,
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