Sell In May and Go Away? Not Yet. Futures are Up
Futures are up for today, though no one knows what the future will bring by week’s end, for there is many a variable at play here as Sell in May and Go Away enters its second week. Tech leads the way this morning as Nasdaq futures (NASDAQ:QQQ) are up more than two thirds of a percent, while the Dow and S&P 500 (NYSEARCA:SPY) lag behind, up 0.2% and 0.3% respectively. Possible factors influencing premarket moves are positivity over the 3.9% unemployment rate, or simply follow through off the ebullience of Friday when equities jumped over 1% across the board to end the week. Oil (NYSEARCA:USO) moving above $70 may have something to do with it.
Buffet Bashes Bitcoin Buffoons, Billionaires Balk
Bitcoin bulls were otherwise relieved that at least he doesn’t think it’s rat poison cubed, or worse yet, hypercubed, leaving room for a possible buying opportunity. Buffett’s deputy Charlie Munger was a bit more positive, calling bitcoin “dementia” and equating it to “trading turds,” which is not as dangerous as rat poison. Meanwhile, bitcoin continues to hover close to $10,000. Bitcoin cash (BCH-USD), which some mining communities consider the real bitcoin, has nearly tripled in a month. Meanwhile, younger, more “hip” billionaires like Jack Dorsey and Peter Thiel, demur. They still like bitcoin, and are not fans of rat poison nor turd futures.
A Busy Economic Calendar This Week Featuring PPI and CPI
Key economic data this week will include the Producer Price Index and the Consumer Price Index. The PPI comes in on Wednesday at 8:30am and the market expects a year over year increase of 2.9%, far above the Fed’s stated goal of 2% inflation. The CPI comes in the next day at 8:30am, and the market expects 2.5%, still far above the 2% goal. When will the Fed acknowledge that inflation is above its self-proclaimed targets? Not while it’s anywhere near 2%, according to San Francisco Fed President John Williams, who emphasized last week in an interview with CNBC that 2% is a midpoint target and that he is comfortable with overshooting it. Meanwhile, the Fed’s actual inflation target remains elusive.
Planes, Trains, Automobiles, and the Iran Nuclear Deal
Airplane deals are in trouble if President Donald Trump decides to scrap the Iran nuclear deal, for which he has a deadline of Saturday, May 12th to decide on. Back in December, Airbus Group (OTCMKTS:EADSY) signed a $19 billion deal with IranAir for 100 airplanes, and Boeing (NYSE:BA) followed up with a $17 billion deal for another 80 plus a $3 billion deal for another 30. Look for a sharp drop in these stocks if by Saturday Trump scraps the deal.
Nesbucks Coffee Anyone?
In a move sure to caffeinate any coffee fan’s day, Nestle announced that it acquired the rights to market Starbucks (NASDAQ:SBUX) coffee all over the world, outside of actual Starbucks coffee shops, which are off limits. The rights cost Nestle $7.15 billion, which will be used by Starbucks to buy its own stock, showing how easy monetary conditions still are despite rising rates. This, by mathematical necessity, will raise its EPS all else being equal, without Starbucks having to actually grow. Starbucks shares are up 3.24% on the news, and though the stock hasn’t done much since 2015, it is still up 1,232% plus dividends since bear market bottom in November 2008. Not bad for coffee returns, or anything else for that matter.