My energy outlook remains basically unchanged, so I won’t spend a lot on that.
Even though gas/oil prices continue to drop, I think they have largely bottomed for now.I did think that a few weeks ago when they started to go up.But now we have seen a pullback.But I think they will continue to go up.
As I have written before I have several long positions set up around this thesis.
Natural gas I had been long since late summer and it absolutely surged.I am back in since it bounced off of $3.I could easily see it going up another 50% or even doubling.I am quite leveraged in all areas of this commodity.The only concern I have is the summer weather is setting in and the storage is now back up to where it should be.The exporting could see a dropoff as well.So, we shall see if it holds up through the summer.
There is some concern in the housing market.The existing sales numbers had a big drop from a month ago.There is now about a 3% difference in interest rates on a new mortgage versus an existing mortgage.For several years there has been a tight correlation between sales and rates.So, this will be interesting to see what happens, especially in certain states, like California and Florida. The new home sales actually rose but the median prices were slightly lower than those for existing homes. There was an even bigger dropoff in new home building.Even though there is a large supply gap, there is a lack of delivery on affordable starting homes.
My energy outlook remains basically unchanged, so I won’t spend a lot on that.
Even though gas/oil prices continue to drop, I think they have largely bottomed for now.I did think that a few weeks ago when they started to go up.But now we have seen a pullback.But I think they will continue to go up.
As I have written before I have several long positions set up around this thesis.
Natural gas I had been long since late summer and it absolutely surged.I am back in since it bounced off of $3.I could easily see it going up another 50% or even doubling.I am quite leveraged in all areas of this commodity.The only concern I have is the summer weather is setting in and the storage is now back up to where it should be.The exporting could see a dropoff as well.So, we shall see if it holds up through the summer.
There is some concern in the housing market.The existing sales numbers had a big drop from a month ago.There is now about a 3% difference in interest rates on a new mortgage versus an existing mortgage.For several years there has been a tight correlation between sales and rates.So, this will be interesting to see what happens, especially in certain states, like California and Florida. The new home sales actually rose but the median prices were slightly lower than those for existing homes. There was an even bigger dropoff in new home building.Even though there is a large supply gap, there is a lack of delivery on affordable starting homes.
The latest VIP survey on new construction projects is interesting.The total construction is up about 3% from the LY quarter.Still both private and public construction is very slightly below forecasts currently.
The Manufacturing PMI is a tad mixed as well.The numbers are also a tad below expectations.The growth is slightly up and output is slightly down.But the demand, domestically is up and internationally is down.
Retail sales continue to look good.They were up about 1.5% from last month and up about 4.5% from last year.
The tariff and trade concerns will obviously affect the macro economics in the short term.But if this is coupled with the TCJA expansion and a further deregulation then the expected growth can be exceeded.
Without getting too much into tax nuances, it will be interesting to see what all is included.
There is talk of the Passthrough Business Taxation being allowed.
This would be a significant implementation.This is one of the things that caused the surge in the business investment and growth after the 2017 tax cuts.
Some are expecting enough cuts in the budget to move the spending $1T below its status quo line.I am not sure with losing headcount and consolidating departments will do enough cutting.So, it will be interesting to see if they cut in other areas to at least stay below the trend line.
The latest VIP survey on new construction projects is interesting.The total construction is up about 3% from the LY quarter.Still both private and public construction is very slightly below forecasts currently.
The Manufacturing PMI is a tad mixed as well.The numbers are also a tad below expectations.The growth is slightly up and output is slightly down.But the demand, domestically is up and internationally is down.
Retail sales continue to look good.They were up about 1.5% from last month and up about 4.5% from last year.
The tariff and trade concerns will obviously affect the macro economics in the short term.But if this is coupled with the TCJA expansion and a further deregulation then the expected growth can be exceeded.
Without getting too much into tax nuances, it will be interesting to see what all is included.
There is talk of the Passthrough Business Taxation being allowed.
This would be a significant implementation.This is one of the things that caused the surge in the business investment and growth after the 2017 tax cuts.
Some are expecting enough cuts in the budget to move the spending $1T below its status quo line.I am not sure with losing headcount and consolidating departments will do enough cutting.So, it will be interesting to see if they cut in other areas to at least stay below the trend line.
Consumer spending still continues to have a rosy outlook and I expect that to continue.Despite a drop in sentiment, consumers continue to spend.This, coupled with growing income and people’s ability to continue to add on credit should bode well for this sector.
Business investments is an entirely different scenario.This sector is more easily influenced by sentiment.So, the uncertainty and the interest rates I think will hold this sector back in the near term.Some are saying that one segment in this sector that will continue to grow and get the investment is the IP and AI area.I do agree with this.I am heavily invested in the AI and quantum computing sectors. For this reason I have added a lot to the SOXL portion of this investment as well as some of the individuals. But overall, I think this is very much a wait-and-see sector.
Foreign Trade is an area where I think there will be larger growth than most expect.Most are seeing the uncertainty and think this sector could slump.I am more optimistic that the trade deals will get done sooner than later.
Consumer spending still continues to have a rosy outlook and I expect that to continue.Despite a drop in sentiment, consumers continue to spend.This, coupled with growing income and people’s ability to continue to add on credit should bode well for this sector.
Business investments is an entirely different scenario.This sector is more easily influenced by sentiment.So, the uncertainty and the interest rates I think will hold this sector back in the near term.Some are saying that one segment in this sector that will continue to grow and get the investment is the IP and AI area.I do agree with this.I am heavily invested in the AI and quantum computing sectors. For this reason I have added a lot to the SOXL portion of this investment as well as some of the individuals. But overall, I think this is very much a wait-and-see sector.
Foreign Trade is an area where I think there will be larger growth than most expect.Most are seeing the uncertainty and think this sector could slump.I am more optimistic that the trade deals will get done sooner than later.
Financial markets are the diciest area to forecast.There is just more volatility in equities than there used to be.The upward trend may always be up but there are severe bounces.FOMC will likely decide on just two cuts to interest rates this year most predict.This is highly dependent on the inflation and what it does later in the year.This quarter it seems to hold steady.This is a leading indicator of the expected growth in the economy as well, by about 2-3 months.
The USD has started to bounce back after severely weakening.
I am setting up to make some long plays on the USD against some other currencies as well as the DXY itself.
But overall I think the economy continues to grow this quarter at a steady pace.I think the surge could come later in the year once some of the uncertainty has worked itself out.
Financial markets are the diciest area to forecast.There is just more volatility in equities than there used to be.The upward trend may always be up but there are severe bounces.FOMC will likely decide on just two cuts to interest rates this year most predict.This is highly dependent on the inflation and what it does later in the year.This quarter it seems to hold steady.This is a leading indicator of the expected growth in the economy as well, by about 2-3 months.
The USD has started to bounce back after severely weakening.
I am setting up to make some long plays on the USD against some other currencies as well as the DXY itself.
But overall I think the economy continues to grow this quarter at a steady pace.I think the surge could come later in the year once some of the uncertainty has worked itself out.
Thank you sir. But the question is always: will it stay the same, get better, or worsen. Hope things are going well for you in lovely Maine as it warms up.
@nature1970
Thank you sir. But the question is always: will it stay the same, get better, or worsen. Hope things are going well for you in lovely Maine as it warms up.
Doge cuts to federal government employees hurt both Republicans and Democrats. Veterans employed ,who faired the worse, were his strongest base.
The consensus is that the world and American economic forecast is headed to recession.
Tariffs effect businesses,consumers and his support systems. Musk depends heavily on foreign parts for Tesla industry. Beyond cars battery storage systems are eroding his bottom line. Many other sectors are going to be challenged with supply flow issues.
Maine economy for example is directly impacted by trade disagreements with Canada, electricity , wood , and seafood as well as tourism.
Case in point old orchard Beach is a destination for many tourists from Quebec and New Brunswick . Lodging is about half reserved were many play would be fully booked by this time for the memorial Day to labor day weekend.
A million actually has a pipe that runs between edmundston n. B . To madawaska Maine. There now tareif on the flow of wood pulp in the pipe to make paper here. Logging exports tons of
Same won't win elections.
The damage to his slight lead is already done
Doge cuts to federal government employees hurt both Republicans and Democrats. Veterans employed ,who faired the worse, were his strongest base.
The consensus is that the world and American economic forecast is headed to recession.
Tariffs effect businesses,consumers and his support systems. Musk depends heavily on foreign parts for Tesla industry. Beyond cars battery storage systems are eroding his bottom line. Many other sectors are going to be challenged with supply flow issues.
Maine economy for example is directly impacted by trade disagreements with Canada, electricity , wood , and seafood as well as tourism.
Case in point old orchard Beach is a destination for many tourists from Quebec and New Brunswick . Lodging is about half reserved were many play would be fully booked by this time for the memorial Day to labor day weekend.
A million actually has a pipe that runs between edmundston n. B . To madawaska Maine. There now tareif on the flow of wood pulp in the pipe to make paper here. Logging exports tons of
For sure, all valid concerns. I think a lot of that is why Trump is moving so fast this time with his agenda. He knows he has a very limited time before he is handcuffed by the midterms. If he does not vastly improve some areas he will lose ground in the midterms and not be able to follow up on his agenda. Even if it improves, folks are fickle and usually the midterms swing the other way. But for sure, I have been calling for a recession or that we may have already been in one. But some of the numbers look good enough to stave it off, for now. But if Trump can get the trade stuff, tax stuff and deregulation through — then I think the growth continues and folks will be happy. But he knows he is under a time constraint.
@nature1970
For sure, all valid concerns. I think a lot of that is why Trump is moving so fast this time with his agenda. He knows he has a very limited time before he is handcuffed by the midterms. If he does not vastly improve some areas he will lose ground in the midterms and not be able to follow up on his agenda. Even if it improves, folks are fickle and usually the midterms swing the other way. But for sure, I have been calling for a recession or that we may have already been in one. But some of the numbers look good enough to stave it off, for now. But if Trump can get the trade stuff, tax stuff and deregulation through — then I think the growth continues and folks will be happy. But he knows he is under a time constraint.
well articulates Sir.
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