E Tuesday Talk: The Futures Are Bright

As markets in the U.S. and the U.K. return from the holiday weekend stock market futures in New York are modestly bright. S&P futures are up 16.5 points at 4,219, Dow futures are up 171 points at 34,684 and Nasdaq futures are up 48 points at 13,734. Corona guidelines are being lifted across the U.S. and the U.S. economy seems to be officially open. As Congress returns to Washington to continue discussing the Biden Administration's infrastructure bill TalkMarkets contributors take a look at what is up with the economy as well as cyrpto and cloud.

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The Staff at Upfina in their article Rent Inflation Set To Soar This Summer have this to say about the economy based on recently released Personal Consumption Expenditure data from April.

"The latest PCE report from April completed a couple of recoveries and almost completed another. When it comes to compensation, spending, and inflation, the pandemic losses have been all but recuperated. Remember, the people who are able to work from home get paid the most. They have an outsized impact on compensation and spending. Clearly, the bottom third of the labor market hasn’t fully recovered. The hardest-hit areas of the economy haven’t recovered and neither has the entire labor market.

Specifically, compensation is 0.2% above the trend it was running at prior to the pandemic. Real personal consumption is still 1% below the trend. Finally, as you can see from the chart below, the core PCE price index is 0.2% above the 2% trend growth rate it was running at prior to the pandemic."

 

With regards to housing Upfina has these comments:

"Cities are recovering. There is no longer a need to leave the city since the vaccines have stopped the spread of the pandemic. We are within a couple of months of people returning to offices and restarting the much-dreaded work commute via public transportation. As we predicted, rent prices are improving as well. This is going to be a huge driver of core CPI in the summer."

"In a prior article, we explained that consumers soured on buying houses and cars in May because of price increases. A common phrase among home buyers is “I know I overpaid.” Technically, they might not have overpaid. Affordability still isn’t out of control. This is the opposite of a bubble. Banks have not made it easy to get a mortgage. However, people feel they overpaid because there is a mad dash to buy houses above asking prices."

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William K. 3 weeks ago Member's comment

Interesting article and I like that advice "Don't!"