Market Morning: Lots of Fighting, Lots of Trade Wars, Lots of Protests, Futures Down

The Week Ahead: Case Shiller 20 and Personal PCE Inflation

This week will see two pieces of data that will be fairly important in helping determine if the US economy is headed towards stagflation. On Tuesday, the Case Shiller 20 Index for home prices in 20 key metropolitan areas will be published. Consensus estimates are for a 0.4% month over month increase. Any higher than that will indicate inflationary pressures beyond current expectations. On Friday, the Personal Consumption Expenditures Index for May, what people like to call the Federal Reserve’s “preferred measure of inflation” will be published at 8:30 one hour prior to market open. The inflation rate for April was 2.0 on the dot, and any higher than that will officially put us above the Fed’s target for how much value our money is supposed to lose every year for our own benefit.

What to do: A significant overshoot in the PCE could be dangerous here, as global trade wars intensify and the supply of goods and services is about to shrink over and above inflationary pressures already being felt. Related tickers: (NYSEARCA:GLD) (NYSEARCA:IYR) (NYSE:DHI) (NYSE:LEN)

President Trump Moves to Worsen Deficit By Forcing Curbs on Chinese Investment in US Tech

The purpose of tariffs on imports is to curb the trade deficit, but now the Trump Administration is moving to curb investment in the US itself from Chinese companies, which will exacerbate the trade deficit. Concerned about China’s stated ambition to become a world leader in technology, robotics, electric cars, and other areas that probably sound quite terrifying to the people running the White House, instead of encouraging US companies to outcompete China by, say, taxing them less or something, they have decided to prevent China from buying more than 25% of any one US firm. How they intend on enforcing this is another matter they haven’t quite figured out yet, as company shells are passed around for the very purpose of masking the actual owner of something. But, as the White House theory goes, preventing investment in the US should make the US great again. Probably.

Related Tickers: (NASDAQ:QQQ) (NYSEARCA:CQQQ)

Bitcoin , Crypto, Break Through Support, Bob Back Up, Break Through Support Again, McAfee Poisoned

The cryptocurrency space is looking anemic as bitcoin (BTC-USD) briefly broke through support at $6,000 and has come back up again to $6,200, and is now drifting down again. This follows news of more Japanese bitcoin regulation efforts. Two thirds of all cryptocurrency exchanges involve yen, so this could hurt. Bitcoin’s market cap came within a hair of breaking below $100 billion. In possibly related news, John McAfee, bitcoin evangelist, the “Dennis Rodman” of internet security, and all around strange guy, has been poisoned, unless this is a publicity stunt, and is now threatening his purported attackers on Twitter, posting a picture of himself from a hospital bed with his wife and former prostitute, flipping the bird together with smiles on their faces.

What to do: Brace for possible bitcoin capitulation, though it is impossible to say at what price level.

Amazon, Berkshire, JPMorgan, Look to Eliminate Healthcare Middlemen

The biggest retailer (NASDSAQ:AMZN), investor (NYSE:BRK-A), and bank (NYSE:JPM) in the US are coming together to eliminate the healthcare middlemen and bring health insurance factory direct to you. Do these three giants stand a chance of finally lowering healthcare costs for the first time in decades? If a combined $1.66 trillion in market cap can’t do it, then there is no hope. Let’s see what happens.

Related Tickers: (NASDAQ:ESRX)

Microsoft Employees Taking a Stand to Break the ICE

300 Microsoft (NASDAQ:MSFT) employees are embarking on an ICEbreaker. They don’t like the fact that Microsoft has a $19.4 million contract with the Immigration and Customs Enforcement agency, AKA ICE. “We request that Microsoft cancel its contracts with ICE, and with other clients who directly enable ICE,” employees wrote. “As the people who build the technologies that Microsoft profits from, we refuse to be complicit.” This comes after Sara Huckabee Sanders, White House Press Secretary, was kicked out of a restaurant and California Congressperson Maxine Waters has called for public harassment of Trump Administration officials.

What to do: Sing Kumbaya very loudly with fingers snugly in ears.

 

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