Join Tematica Research's Chief Macro Strategist, Lenore Hawkins, and Chief Investment Officer, Chris Versace, as they discuss and debate what's driving the market and the economy this week.
Markets last week
Bulls are dominating - latest Investor Intelligence poll
up to 61.2% bull from 60.8% prior week
Bears down to 15.3% from prior 15.5%
Key Economic Data and Related Events LAST WEEK
Seeing further signs of slowing in geographies that were the first to pull out of the pandemic:
- China’s GDP in Q2 rose 7.9% YoY, slower than the expected 8.1% increase, and 1.3% QoQ after rising 18.3% YoY and a downwardly revised 0.4% QoQ respectively in Q1.
Global inflation remains tame:
- Italy’s Inflation Rate for June was unchanged with May’s 1.3% reading, matching expectations.
Last week’s release of the Consumer Price Index for June found that prices rose 0.9% MoM, nearly 2x the expected 0.5% increase, and were up 5.4% YoY. Both the MoM and YoY increases were at their fastest pace since 2008. Ex-food and energy prices rose 4.5%, the fastest pace since November 1991 and well above the Fed’s 2.0% long-run target pace.
RETAIL SALES STRONGER THAN EXPECTED
Retail Sales for June came in stronger than expected for June, rising 0.6% MoM from a downwardly revised -1.7% contraction in May.
- Came in at 360k, slightly above expectations for 350k and prior week revised upward to 386k from 373k.
- Typical tight labor market has just over 200k.
- If companies are having such a tough time finding talent, why 2x on firings?
Economic Data to Watch THIS WEEK
- Monday - NAHB Housing market index
- Tuesday - Building Permits, Housing Starts
- Thursday - Weekly jobless claims (last week hit a pandemic low, but still well above 200k (ish) we should be seeing), Chicago Fed National Activity Index, Existing Home Sales
- Friday - Markit Non Manufacturing PMI (flash), Markit Services PMI (flash)
Monday, July 19:
- AutoNation (AN) - cars
- JB Hunt (JBHT) - west coast port issues
Tuesday, July 20:
- Chipotle Mexican Grill (CMG:NYSE) - food and drinking places crushed it in 2Q per Retail sales but input costs vs. price increases
- Netflix (NFLX) - growth in streamers esp outside the US, content spending, games
- United Airlines (UAL).
Wednesday, July 21:
- Coca-Cola (KO) - away from home and non sugar beverage demand
- Las Vegas Sands (LVS) - What is Vegas like baby?
Thursday, July 22:
- DR Horton (DHI) - housing demand
- Domino’s Pizza (DPZ) - tough comps year over year - how is it navigating the return to dining out? Is it hitting its margins? forcing it to get more aggressive on deals to lure eaters?
Friday, July 23
- American Express (AXP) - spending - where, how much, US vs. Europe?
- Kimberly Clark (KMB) - last year was strong for paper products, but now what about the impact of lumber prices and the pricing envirnment vs. last year’s paper product shortage?
- Sensient (SXT) - watching to hear what this flavoring and color company has to say about non meat protein demand in the quarter and expectations as BYND re-launched its plant based chicken with Panda Express….
hear, week, retail sales, prices, company, inflation, big, year, report, people, june, higher, expected, fed, economy, market, pandemic, sentiment, pepsi, point
Lenore Hawkins, Chris Versace
Chris Versace 00:03
This is the week ahead brought to you by AdvisorPedia and powered by Tematica Research I'm Chris Versace Tematica's Chief Investment Officer and joining me as always to break down the latest economic news discuss the earnings you have to watch and other high profile items that will be driving the market this week isTematica's chief Macro Strategist Lenore Hawkins, Lenore, how you doing?
Lenore Hawkins 00:25
Yo, what's the word bird? It's been a rough week. Right?
Chris Versace 00:31
Well, what do you mean, we've had some economic data, they're rolling over. We've got some testimonies down in Washington, we've got some testimonies of banks true.
Lenore Hawkins 00:43
What does it all mean to you?
Lenore Hawkins 00:47
That's just home improvement projects. Don't do. You know,
Chris Versace 00:55
I know what you're alluding to. And we do not have that much time to break it all down. Exactly. Exactly. So I think I think the message is choose your contractors wisely.
Lenore Hawkins 01:07
Yes. And don't trust don't trust? Yep.
Chris Versace 01:12
Yeah, no, that's not gonna. No, no, no, that's like, that's like, trusted Angie's List. Who does that? Yeah. Okay. Anyway. So Marcus markets, what's, you know, major markets kind of traded sideways this week, right?
Lenore Hawkins 01:29
Yeah, I mean, by Friday, the markets pretty much down on the weak. But what I find really interesting is that if you look at comparatively, it's still a story of the big guys be in the high fliers. So if you look at the s&p 500 market cap weight versus the s&p 500, equal weight, equal weights underperforming, NASDAQ composite is underperforming, the NASDAQ 100, the nysc composite, which is the one of the broadest measures, it's under port underperforming the s&p 500 market cap. So it's still this is a story of the big boys, the same kind of big boys we've been dealing with are the big guys, high performers. From a sentiment perspective, though the bulls are really dominating the latest investor intelligence poll, put the bulls up to 61.2% from 60.8. The prior week and bears, I mean, bears are in hibernation, they're down to 1515. One 5.3% from a prior 15.5. So, you know, it's it's still Whoo, although the market was trading sideways, because like we said, we're looking for a catalyst, and that's earnings season. Well, well, it's gonna be the catalyst and people. Right, exactly. It was a kid. I didn't know which direction?
Chris Versace 02:44
No, no, I know, I know. I know. But but but but add to that, to that when we see these sentiment surveys becoming so lopsided, that's usually it tends to be another warning sign.
Lenore Hawkins 02:59
Yeah, that's usually the markets tend to perform the best going forward when sentiment, Bull sentiment is at a low and bear sentiment is at a high and vice versa.
Chris Versace 03:11
Okay, well, let's get into the economic data when we shift over and a little bit to earnings. I'm going to share why I think there's probably more downside risk to be had this earnings season, based on what we're going to hear and for the market.
Lenore Hawkins 03:25
So first off, we're continuing to see signs of slowing in the geographies that were the first to pull out of the pandemic, China's GDP in the second quarter Rose 7.9%, year over year, that's slower than expected 8.1% increase. So it was one of the first to come out we're kind of seeing that if you look across the world, those that popped out first, or are kind of getting that slow, we're starting to see that in the US. Global inflation's remaining really tame Italy's inflation rate, for example, for June was unchanged at 1.3%. That's much of the eurozone is very low to below 2%. So it's interesting when you look at that, and keep in mind that domestic inflation because the US economy is the most open, right and us inflation is heavily tied to the global level around 80% correlation. So that's an interesting story. Then when we look at this week's release of the consumer price index CPI for June, that came in nearly twice as hot as expected with prices rising point 9% month over month versus point 5% expected and they were up 5.4% year over year. I mean right 5.4% good CPI is is the the main inflation indicator, both a month over month and year over year over year increases were at their fastest pace since but keep this in mind fastest pace since 2008. Interesting period from 2009 through now is not exactly known for a massive level of inflation. So keep that in mind. Now if we x food and energy prices were still up. Unbelievable. 4.5% that's the fastest pace going back to November of 1991. And the keep in mind Feds target 2%. So 4.5% that's the metric that the Fed looks at dx food and energy more than double the feds target. But is they say the devil is always in the details. So if we dig into those, the increase was driven in large part by used car truck prices, which were up 45.2% year over year, current truck rentals up 88% gasoline 45% year over year, public transportation which includes plane fares of 17.3%, year over year, hotel and motel room rates up 17%. Right now, going through all the different things that are included in the CPI inflation is actually really coming from about nine items out of the hundreds that go into the index. So what we're talking about is roughly about 10% share of the entire CPI and about 13% of the core that rose at over 5% pace in June. And that's more than 60% annualized inflation, right? That's insane. I mean, that's hyperinflation. But that's the third month in a row where just a fraction of the CPI is dominating the entire report. If you look at the 80% of the economy that is not being distorted by the supply side constraints that we've been seeing that they were caused by the pandemic lockdowns and open up in the struggles getting supply chains all worked out. If we also cut out the the fiscal impact that's kind of been really affecting demand and being pulling forward demand, because that's really run its course, inflation is really more about 1% annual rate over the past six months if you remove those distortions. So the bottom line when you're thinking about inflation, is nearly 90%. Of course, CPI rose just point 2% month over month and 2.1% year over year. That's the big inflation story. Now. Does that continue? Does that pan out we'll see in the months to come. But it is something to keep in mind because the headlines are all screaming that you know, sky is falling mass inflation.
Chris Versace 07:12
Well, long side of that, too. We are starting to hear more companies say PepsiCo conagra said, Hey, we're fight we're facing higher input costs. We're facing higher fuel costs, we're going to put some pricing into action. You know, Chipotle, they said something similar a couple of weeks ago. And I think I just think it's going to be a very big topic during the current earnings season, particularly as it accelerates over the next couple of weeks. I mean, you and I were chatting before this and you know, some extent, I think you're right, the mantra is, Hey, I can get a price increase through it. Right? Why not?
Lenore Hawkins 07:45
That's just one of the challenges that we're going to see when you look at the the what's really going on in the economy if you're a company and all you hear is inflation, inflation, inflation. Of course, you're gonna take the opportunity to increase your prices, even all of this is and I'm doing the air quotes, transitory, you're going to take the opportunity to increase your prices.
Chris Versace 08:03
Yeah, the problem with that is those price increases are distinctly transitory. Yeah. Okay. What about retail sales? You know, we know that the consumer is arguably, directly indirectly a very big lifeblood component of the economy. Were you surprised by the retail sales for June that again, headline came in better than expect?
Lenore Hawkins 08:26
Yeah. So the retail sales came in stronger than expected. They're at point 6% month over month. But the prior month was downwardly revised to a 1.7% contraction in May. Ex autos retail sales were also stronger than expected, they were up 1.3% month over month, but that's after a downward lead revised point. 9% contraction in May. So yeah, I was surprised to see it that strong. But then when I look at the downwardly revised, right, because it's one month of retail sales data is you really want to be looking at a much longer period, right? Because this this does ebb and flow. I don't think this one was particularly telling what I will be looking for next month is to see if we got another downward revision. Because when, as with all things when you see downward revisions, because these things are all they don't actually get the real retail sales numbers. It's not like sitting somebody sitting there and like, Okay, what what in target how what did Walmart have right there, they're not actually getting retail sales for like all the companies in the world that sold or in the US that sold retail, right? It's a it's a model. And that model is impacted by what happened the month before. And then when you start to see the same thing with like unemployment, all of these things are really model based. And they're they're more model weighted in when you get the first draft of it, when you start to see the numbers being downwardly revised. And if you start seeing them down, really realized again, and again, like month after month after month, that's telling you that there's a big shift going on. So I'm a little bit more focused on that. than the actual number.
Chris Versace 10:01
So when I looked at the report, you know, I always think of it from a stock perspective. And the great thing about the June report or the March when the September the December one is they give us the full picture, sort of, given what you just said, about what happened during the quarter. And we can kind of use that to frame out what we might hear from companies in various sub sectors of the board. So for example, you know, food service and drinking places up 72% year over year in the second quarter. They were closed. Yeah, well, year over year, but it shows that consumers are opening their wallets in spending in these areas. So same for clothing, same for electronics and appliances all up huge. But But when I look at the June or June numbers, compared to two q over two Q, it echoes what you've been saying in that the numbers are far slower in that lat that third month of the quarter than they were in the first two.
Lenore Hawkins 11:01
Right? Yeah, we're getting that rollover. And something else to keep in mind when we're looking at these retail sales. And the unemployment and basically all the metrics in the economy is the dichotomy right now we're staying the way the US is looking at that, you know, that little virus you might have heard about this before. The way the US is looking about that what's going on in the media with that, versus the rest of the world. And it is really fascinating to us, it's like a done deal, Robert, fine. The rest of the world doesn't have that view on it. And the reality is, in over 30 states in the US, infections are up more than 50%. In the past week alone. People are acting like inflation is the big thing to be really worried about and totally ignoring that. Now. Los Angeles just brought mask mandates back, we had three new york yankees are tested positive, even though the team is 85%. Fully vaccinated. So I think, to your point, that's yet another potential downside risk.
Chris Versace 12:07
Oh, not 100% of the Yankees vaccinated?
Yeah. Doesn't that make that? Doesn't that seem strange to you? Yeah.
Chris Versace 12:16
I don't get that. I really don't get that. Next week, I know we have a rather light light ish economic calendar compared to some other weeks. What key pieces of data are you looking at?
Lenore Hawkins 12:30
So next week, really, the key data is back to housing. Monday, we've got the nhp housing market index. So are those prices still skyrocketing, we've got building permits, that's a good more of a leading indicator, right? You gotta pay to get the permit before you build it. Before you sell it. That building permits on Tuesday, housing starts on Tuesday, then we've got on Thursday, existing home sales. So that that's a really rich set of data to see what's going on in the housing market. Thursday, also we've got the weekly jobless claims Now, last the prior week, hit a pandemic low. A great number came in at 360,000, which was slightly above expectations for 350,000. And the prior week, though it was here we go revised up. So I'm okay as we're having a shift there. And also, typically, the kind of a tight labor market has just over 200k. So, you know, here, we're still having firings well above that pace. And while we keep hearing from companies, it's so hard to find people to try to fit jobs. Why are we seeing nearly twice what you would double the level you expect to see on fairings? So there's more going on here. So I'll be looking at that on Thursday. And finally on Friday, you get the market non manufacturing PMI and its sister report this IFM services PMI look at those two, those are they're useful, but looking at those always keep in mind their sentiment, not hard data. So it's useful but sentiment data.
Chris Versace 14:05
Yeah, to me that direction on that quarter flow is going to be key to see the rolls over further.
Lenore Hawkins 14:10
Yeah, great. Okay. All right. So why don't you talk to me about some things we heard from Pepsi this week.
Chris Versace 14:18
Well, yeah. So you know, there was a handful of earnings out this week that really worth paying attention to and Pepsi, you know, it's not a constituent of our cleaner living investment theme or the corresponding ETF from amplify ETFs. But what they said was actually quite a bit kind of interesting. Again, Pepsi is a snack and sugary beverage company.
Lenore Hawkins 14:44
So when they talk about music, we think Pepsi and think you know, spelt
Chris Versace 14:48
No, no, but they called out some comments that said that they see consumers going towards a more holistic health, mental health, physical health, exercising And being more aware, aware of what they're putting in their bodies. And what really jumped out to me is how they talked about the real push for non sugary beverages in their portfolio. And they said that that's the area that's actually growing the fastest. They also talked about making an acquisition in a theater snacking environment for popcorn. I'm a big popcorn fan. So I will be looking out for I believe it's pop corners in the PepsiCo portfolio. But Pepsi wasn't the only thing that really caught my eye for our cleaner living investment theme. Tesla, which everybody tends to think of, and rightly so as an Eevee company, they are actually teaming with Brookfield asset management and a real estate developer to unveil what they're calling the most sustainable residential community in the US. And it's going to use Tesla's solar roof tiles and power wall to battery storage. This I think, is gonna be something to watch as, you know, cleaner building tends to take off, you know, when we when you and I talk about it, we tend to think about recycled materials in the light. But this is a little twist on that. So I think it'd be something to watch. On the cybersecurity data privacy fraud. Something just you know, whenever companies make moves, it always kind of confirms the thesis. Microsoft is buying a security software, company risk IQ. Their business is really centered around detecting security threats in the cloud. So to me, Microsoft's scooping up a company to bolster its position in cybersecurity. That's a big deal. Probably the biggest news coming out of last week was the three fold part of Taiwan semiconductor. Yeah, and Ericsson. So they're having a good year as well, Taiwan semi, which is the biggest chip foundry company out there partners with, you know, Qualcomm and like they reported June quarter sales that Rose 28% year over year. And it serves as a high point of confirmation for folks that we're talking about channel checks in the like on Wall Street about stronger than expected smartphone demand. That 28% year over year is really, really confirming that Taiwan semi also boosted their outlook for the current quarter, citing not only smartphone demand, but a surprising strength in auto chips, which could be signaling that the current auto ship crisis is starting to improve. We'll want to pay more attention about that. When we hear from the likes of Ford, GM, Honda and the like in the coming weeks, Nokia and Ericsson also confirmed that the 5g rollout is accelerating. Nokia even said that, hey, when we report our quarterly earnings, we're going to actually lift our guidance. Don't ask us what we're doing now. But we'll tell you that we're gonna lift it. Right one of the it's one of those that is one of the strangest press releases have ever seen in my life. So that's all actually very good in point of confirmation from Taiwan send me Nokia, and Ericsson for a digital infrastructure and connectivity, investment theme. But I also want to talk about something that also caught my eye not respect to our themes just just for something that I think is really, really encapsulates what we're likely to see in the June quarter earnings season. And that's a company like American outdoor brands, they reported mixed quarterly results, that tends to happen. They their EP s was better than expected, but they missed on the revenue on the stock was hammered by about 13%.
Lenore Hawkins 18:42
Now, we've got it has so much positive Yeah, but there's so much hope pot price in the market.
Chris Versace 18:49
I as I would say there's a lot of applications are actually higher than the expectations. Right. Right. A lot of hopium in the market. And I think when we look back at all the things that happened in the first half of the year, right, you know, the Fed is reiterating what they're doing stimulus checks, blah, blah, blah, blah, blah, vaccines, reopening economy, infrastructure bill, all you just pile all that on. And you had earnings expectations Rise, rise rise in now, as you were alluding to earlier, and you have the last couple of weeks, the economic data is rolling over the variance is, you know, raising some concerns, input costs are higher, you know, margins might get squeezed all this other stuff. It makes me think that we're going to hit a very volatile June quarter earnings season if companies are not able to beat what a lot of people talk about as the whisper numbers. Yeah. Oh, and the other thing just exiting the week, just on infrastructure are your good friend. Alexandria Castillo Cortez is saying that she is going to tank she is going to tank the bipartisan infrastructure bill. Let's democrats passed the three point 5 trillion reconciliation bill. And to me that, you know, if you if you were to take it, you know, brick by brick, I think what we've seen over the last four or five weeks is all every positive brick has been kind of pulled out of the wall a little bit.
Lenore Hawkins 20:14
Yeah, I mean, you think about what where we were three months ago, and three months ago, the pandemic was over, the economy was growing faster than it has in decades. Right. Everything is just fantastic. There are shortages. But there's this fantastic the the growth in the labor pool is just doing amazing. And now, what we're facing is, okay, so people still don't want to go back to work. Partially because of fears over, you know, that that that little virus, you've also got concerns with what's happening with schooling in the fall and daycare, right? Because that could keep a lot of people who care in particular, right that what are the daycare options, what's going to be going on with the school because school is daycare for for a lot of families, if those aren't able to go back as normal, so people are still hesitant to hop into the workforce. Because of that. And you also had, which has been a really interesting surprise is, with people working in a very different way for the past year ish. Plus, in some cases, there's been a different shift towards works, you have people who are saying, you know what, I'm not gonna go back to the office and do work as normal. Either you, my employer, we got to work something else out, or I'm going to maybe work on my own. And we've also seen some people that are saying, you know what, I'm going to go retire early, because after what we've just been through, I want to enjoy life just a bit more. I was the face of the of the workforce has really changed.
Chris Versace 21:40
I resemble some of that, but certainly not the early retirement part now. Definitely,
Lenore Hawkins 21:44
I can't imagine.
Chris Versace 21:46
Alright, should we jump into earnings for next week? Let's do it. Alright. So one day, the two big companies, this is Monday, July 19, auto nation. You know, you talked about that huge surge in US car prices. Let's see if that flows through to auto nation if they deliver better than expected results. We're also gonna want to hear what JB Hunt has to say that's one of those logistics companies, you know, truck and rail they but they're on the truck side. The reason I want to pay really pay attention to them is we've been reading about some West Coast, West Coast port issues, say that returns back. I don't think you can you try. Yeah, West Coast port issues in how ships are once again being stacked up? Yeah. And with the labor shortage you alluded to, you know, they're not getting unloaded. And it's it's really causing some bottlenecks. congestions and supply chain issues. So I want to hear what JP has to say about that. Tuesday brings Chipotle a favorite restaurant. That's one I read this on the list.
Lenore Hawkins 22:47
Top Five, we pay top five?
Chris Versace 22:51
No, no, no. I mean, is it good? Yes. Well, I eat their favorite when you talk about ...
Lenore Hawkins 22:58
I'm just saying like Tuesday's kind of your day between Chipotle and Netflix.
Chris Versace 23:04
All right. That's true. That might be true. You know, there is something to be said with Netflix and chill with a burrito bowl. I will agree with that. Anyway. Anyway, so yes, on Tuesday, like I was saying to pull the reports and we know that the food service and drinking place retail sales, you know, crushed it in the second quarter AAA is really embracing digital, their support lanes. And they are they embrace our cleaner living investment team. So I think that they're they're going to continue to deliver better than expected numbers. But the thing I want to watch out for something alluded to earlier, what are they saying about input costs versus price increases? When those go into effect? How long do they think they'll be in effect for Netflix, Lucky streaming company, we all know that it's a very competitive market, the key figures to watch here are going to be the growth in the number of streamers, particularly those outside the US. That's the real area of growth. And alongside of that, you know, how are they How much are they going to continue to spend in content in what about this gaming initiative that we're hearing about? What kind of capital intensity is that going to take from them? And then finally, on Tuesdays United Airlines, look, you alluded that airline prices per tickets are going higher. Okay, what about butts in seats? What about international travel, business travel? That's what we want to know.
Lenore Hawkins 24:30
And I'd be interested to hear how they're handling right now. Americans can fly to for example, in this is part of how things are so complicated, because not every country's in the same place. Americans can fly to Europe or not. Countries are never in the same. Okay, it's Friday. Sorry. Thanks for that insight. You've got Americans are able to fly to Europe, but Europeans are not allowed into the US which is really complicated for airlines. Because you, you would like to fly them from A to B and then have people in B want to fly to a if a can go to B, but b can't go to a makes it complicated.
Chris Versace 25:12
So and also, somehow somehow I hear that and I think hotels should be killing. Anyway, good.
Lenore Hawkins 25:19
I'd be interested to hear what they have to say to you compared to because you're American. You're sorry, United Airlines has been expanding their fleet, whereas American Airlines is not exactly going in the same direction with that.
Chris Versace 25:29
No, no, no, no, you're absolutely right. Okay, Wednesday brings us Coca Cola. You know, for me, the Coke story is are they benefiting and to what degree from the reopening of the economy and they're away from home business, also to just give them we said earlier about PepsiCo. What is coke seeing a beverage portfolio for non sugar beverage demand? Also Wednesday, Las Vegas Sands and I apologize, Lenore, but I gotta say like this, you know, Hey, man, what's Vegas? Like, baby? Right?
Lenore Hawkins 26:02
Well, I think a lot of people are hoping what happens in Vegas stays in Vegas, given that Nevada has the highest infection rate in the country. I did not know. Yeah. And how much that's affecting business.
Chris Versace 26:15
Yeah. Well, you know, there were reports early on that, you know, Vegas was going crazy. And the monthly data from the Nevada gaming board was positive. But remember that these companies like Las Vegas Sands and make a lot of money, restaurants, hotels, not just at the tables, yeah. Okay. Thursday, Dr. Horton, they're going to ask me about one of one of your favorite topics, which is housing. You know, we'll want to see not only what the orders are in the backlogs in pricing inside that backlog, what's likely to come on the back half of the year but are they trying to pivot their portfolio towards lower prices or not? And then the other big company on Thursdays maybe dominoes? Certainly not one of my top five. I think what they have so tempted, I don't even you know, I know their name is Domino's Pizza, but ...
Lenore Hawkins 27:05
i love pizza. I don't want and that's you know, I eat Italian pizza from Italy. So I'm kind of picky, but it's pretty good pizza. Pizza. Good pizza.
Chris Versace 27:14
What's your what's your topping on a Domino's? Pizza?
Lenore Hawkins 27:17
Pepperoni. You're gonna go Domino's you go classic pepperoni pizza.
Chris Versace 27:22
All right. All right. I'm shocked in hearing that. Like Domino's Pizza can eat a lot of layers, like an onion. Anyway. Anyway, so when Domino's reports Look, they were killing it. They were the poster child for pandemic order out delivery. So they're going to face very difficult comparisons year over year input costs. Well, how's it navigating the dining out? Is it hitting its margins? Are they being forced get more aggressive on deals and lower eater? So that's, that's the big question. The other thing too, though, is with the spike in fuel prices, how are they dealing with that as well? Because they are delivery business? Friday, anything you're watching on Friday?
Lenore Hawkins 28:06
Well, I want to have a little chat with American Express for increasing their annual fee.
Chris Versace 28:12
Oh, you must be one of those highfalutin Platinum card owners.
Lenore Hawkins 28:17
Okay, in my defense, I do it because it was so much international travel, you kind of need that one because it it doesn't charge you those ridiculous fees on currency.
Chris Versace 28:27
Lenore Hawkins 28:28
No, no, it actually saves you a lot of money. But I mean, what is the limit on this? Like? How just how much do they think they can charge for your is there? Is there a point at which I'm going to say I think it's going to I think it's going on like 700 bucks. Right? It looks like it's all the way that's you know, yeah. It'll be interesting to see with what we're hearing in retail sales people are out where, where they're spending, what's going on here? What's going on?
Chris Versace 28:51
There. Right. Right. I also think too, it'll be interested to hear some of their comments in the US, as the US, you know, was on was on the path to reopening. But, you know, as we talked about last week, there are certain markets in Europe that were starting to add renewed restrictions as a result of the Delta various, so just I won't want to get a feel for what they're seeing and see how real time they're willing to talk about it. We also got Kimberly Clark, last year, as we all know, was a very strong year for paper products. A lot of them stocked out. And prices were ridiculous for all that for that very small container of TP, which nobody needs. Yes, yes. But this year, you know, lumber prices were a lot higher earlier in the year is that how's that washing through? Yeah, they're they're about 50% lower now. Correct? Correct. Correct. But But again, that has to work through their backlog of products. So be curious to see what that means for their margins. Also want to learn what's going on with their own pricing environment because, you know, look, paper products, talk about the most any elastic product on the planet. curious to hear what they have to say about that. And then finally sensient, which is a flavor and colorings company, they also report on Friday. I want to hear what they have to say given the aspect of our Sustainable Future of food, semen index that really focuses on plant based foods, we will also have alternative meats, correct not non non non non non meat meat. plant based proteins, how about the anyway for that and for cleaner living, and it's percolating, because we're starting to see a lot more companies attack this in particular beyond meat just relaunched their plant based chicken with Panda Express.
Yeah, I see that comment. And I'll taste like chicken doesn't mean anything else when or that you're keeping on tabs next week?
Lenore Hawkins 30:47
Yeah, I'll be looking out actually to here this week. Chair, fed Reserve Chair Jay Powell had a bit of a tie. I'm expecting that there are a few drinks late at night, when he got home because he got pummeled by Congress. He did.
Chris Versace 31:03
He tipped me out. So you can see it coming.
Lenore Hawkins 31:06
You know, that was coming. And that's part of the job, right? Because the Congress, they need their their airtime so that they can yell and scream about how it's the Fed small and prices are higher. And they can then turn to their constituents and say, Look, I yelled at him.
Chris Versace 31:20
Oh, right. But did you see how fast Yellen wrote in Thursday afternoon? Oh, yeah. So I saved him.
Lenore Hawkins 31:27
Can you imagine they're like WhatsApp feed. It'd be hysterical. If you could like little WhatsApp conversations going on between the two of them.
Chris Versace 31:35
Now you're saying that because it's encrypted as opposed to some of these other messaging systems?
Lenore Hawkins 31:40
Right. I think more signal, I think you're gonna have to have encrypted,
Chris Versace 31:42
I think I think they're more signal people to be honest with you. Snapchat disappears. But does it though one, one screenshot, and it's there forever.
Lenore Hawkins 31:52
So given that I will be looking because the feds are under a lot of pressure. And you're having Congress trying to kind of blame the Fed because it had nothing to do nothing. On the fiscal stimulus. Those trillions and trillions of dollar that were poured into the economy has nothing to do with any prices. It's all about the monetary policy. I'll be looking to see what the various Fed officials that are always chatting given speeches, what they're saying, because it's definitely a Fed under fire. And the market will react regardless of what actually happens. What they actually do, the market will react if they start catching wind that the Fed is going to get is buckling under that pressure.
Chris Versace 32:33
And I think I may not be next week, but I know that Christine Lagarde said that the ECB was going to be doing some stuff and put a monetary policy that might hit next week that might follow the week after but I think other than that, I think that's pretty much the week ahead.