Just an Alligator in a Tuxedo Counting Money Before Earnings Season (Nothing to See Here)

The week ahead features critical updates on inflation, testimony on anti-competitive practices, banking earnings, and a long-awaited report on U.S. consumer health.

Saturday, July 8, 2023

Dear Fellow Expat:

Greetings from my daughter’s ballet class.

I’m writing to you while seven five-year-old girls are practicing tap dance.

So… THAT’S the world’s most annoying sound…

If I can analyze the markets through this, I can do anything.

The S&P 500 and Russell 2000 rallied yesterday after the jobs report showed fewer new positions than were anticipated. Wall Street analysts and former White House economists cheered the report, suggesting that a soft landing is again possible.

They seem to have missed two things. First, job growth was linked directly to people taking second jobs or working for the government (a drag on productivity). Second, wage growth increased by 4.4%, more evidence that rate hikes alone won’t bring inflation down to the target. I’ve explained – all week – why the central banks will fail in their mission. They need help with fiscal policy and supply-friendly regulatory policy.

They’ll receive neither from Congress any time soon…

Maybe that’s wh…