2021_11_22 — THEME: Fed, EVs, StayFlation, Philippines, Real Estate, & Tweets
November 22, 2021
Michael’s CIO (Check It Out) Report on the week just past — events, sarcasm, and global macro reflections
THEME: Fed, EVs, StayFlation, Philippines, Real Estate, & Tweets
- PowerBrain: President Biden renominated Jerome Powell as Fed chair and nominated Lael Brainard as vice chair — investors tend to like positive consistency and believe that Powell will protect the economic recovery he has helped foster, but the markets are pools of varied opinions and not everyone is thrilled. Protecting the economy could be a double edged sword for those that also fear inflation
- Big in Japan: New Prime Minister Fumio Kishida announced a $490B stimulus package (a third round of relief spending) that will give Yen direct to families with children — huge size but questionable effectiveness in a shrinking economy where people often save rather than overspend
- Swee’Pea: Salad chain Sweetgreen, with 140 restaurants across 13 states, surged to a $5.6B valuation after its IPO — it still lost $87MM in its most recent period, but same store revenue is up +21% and healthy eating has not gone out of style🌱
- TwitterMent: S&P will launch two new indices that track daily positive Twitter sentiment by measuring bullish and bearish stock Tweets — sounds like an index that could be manipulated🧐
- Closed R Us: CVS to close 900 locations (1 in 10) — this will hit many core real estate holdings that thought they had a safe and steady anchor tenant⚓️
- Raised brow: Frida Kahlo’s ‘Diego y yo’ painting (an intense 1949 self-portrait) sold for $34.9MM, a record for Latin American art💗
- Sales: General U.S. retail sales are rising at a solid pace and a strong holiday season is a decent prediction, but a sustained rebound in services spending is the missing link for economic recovery — higher prices are also elevating reported sales numbers, i.e., more dollars spent does not necessarily mean more items bought
- Outbid: Running Point was outbid on naming rights for the Staples Center, home of the NBA’s Lakers and Clippers, the NHL’s Kings, and the WNBA’s Sparks 🏟 — hello Crypto.com Arena
- Neighbors: Canada’s Justin Trudeau and Mexico’s Andrés Manuel López Obrador met with Biden, but are unhappy about proposed subsidies for American-made electric vehicles — things are still not hunky-dory with our neighbors
- EV: At the L.A. Auto show, I remembered that EV stands for Electric Vehicle and not Elon Vehicle; tempting new contraptions from Vinfast, Ford, Kia, Hyundai, Edison Future, Fisker, Canoo, Rivian, Mullen, Lucid, Nissan, GM — 🚘as mentioned in previous CIO Reports, there will be a glut of options; additionally, Apple has renewed its push to develop a self-driving EV
- Still alive: Elon Musk and Senator Bernie Sanders were in a Twitter feud over a wealth tax — reality will come knocking
- Philippines: Rather than compete against each other for the presidency, Sara Duterte-Carpio (daughter of the incumbent president) will pair with Ferdinand Marcos Jr. (son of the former dictator) in respective vice-president and president bids in the upcoming May election. President Rodrigo Duterte will run for a Senate seat — reality TV!
- Spike: Covid cases are spiking even higher in parts of Northern and Eastern Europe — fears mount that new restrictions will spread across the continent again and slow economic reopening
- StayFlation: As expected, U.S. inflation numbers came out high, although the rate of change is coming down, suggesting that supply chain issues are steadily improving — ⛴nonetheless, inflation is going to stay and I can still see a half-dozen cargo ships from Manhattan Beach
Happy Thanksgiving and best wishes for the week ahead😃,
Michael
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Michael Ashley Schulman, CFA
Partner / Chief Investment Officer
“We deliver bespoke investment solutions, innovations, and unique perspectives to you and your family.”
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Disclosure: The opinions expressed are those of Running Point Capital Advisors, LLC (Running Point) and are subject to change without notice. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Forward-looking statements cannot be guaranteed. Running Point is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Running Point’s investment advisory services and fees can be found in its Form ADV Part 2, which is available upon request. RP-21–46
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