Barron’s
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Forbes
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©2024Banco de Mexico Diego Rivera Frida Kahlo Museums Trust, Mexico, D.F. / Artists Rights Society (ARS), New York
November 22, 2021
Kaydan’s Commentary
THE MARKETS
Thinking about the possibilities.
The Standard & Poor’s (S&P) 500 Index finished last week slightly higher and has gained about 6 percent during the past 25 days; however, investors have curbed their enthusiasm. The S&P 500 hasn’t experienced a move of one percent or more in 25 trading days. That’s the longest period without a move of that size in about two years, according to a source cited by Avi Salzman of Barron’s.
It’s possible investors are taking time to think about the current mix of conditions and how the economy and financial markets may be affected. For example:
The performance of major U.S. stock indices was mixed last week, according to Avi Salzman of Barron’s. The yield on 10-year U.S. Treasuries dropped last week.
We hope you have a wonderful Thanksgiving.
INFRASTRUCTURE AND ECONOMIC GROWTH…
The bipartisan Infrastructure Investment and Jobs Act (IIJA) was signed into law last week, and the Build Back Better Act (BBBA) passed the House of Representatives and moved on to the Senate.
For decades economists have tried to determine how spending on infrastructure – roads, bridges, canals, railways, broadband, and other projects – contributes to economic growth. There are diverse opinions on the subject. Here are a few:
— Mark Zandi and Bernard Yaros, Jr., Moody’s Analytics, July 21, 2021
— James Pethokoukis, American Enterprise Institute, April 2, 2021
— The Economist, May 1, 2021
— Marcela Escobari, Dhruv Gandhi and Sebastian Strauss, Brookings Institute, March 17, 2021
The IIJA will invest approximately $1.2 trillion, including $550 billion in new spending, on infrastructure projects across the United States. IIJA is expected to increase the deficit by about $256 billion over the next 10 years, according to the Congressional Budget Office.
Weekly Focus – Think About It
Which of the following holds the largest portion of the U.S. national debt?
a.) China
b.) Social Security
c.) Military Retirement Fund
d.) Japan
e.) Medicare
Answer: B
Sources:
https://www.barrons.com/articles/stock-market-earnings-season-inflation-51637374587?refsec=the-trader (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/11-22-21_Barrons_Stocks%20Are%20Up%208%20%25%20Since%20Earnings%20Season%20Started_1.pdf)
http://www.sca.isr.umich.edu (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/11-22-21_Surveys%20of%20Consumers_2.pdf)
https://www.cnbc.com/2021/11/16/retail-sales-rise-faster-than-expected-in-october-even-as-inflation-pushes-prices-higher.html
https://insight.factset.com/earnings-insight-q3-21-by-the-numbers-infographic
https://insight.factset.com/highest-number-of-sp-500-cos.-citing-supply-chain-on-q3-earnings-calls-in-over-10-years
https://www.barrons.com/articles/oil-prices-drop-on-bearish-supply-and-demand-signals-51637336738 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/11-22-21_Barrons_Oil%20Prices%20Drop%20on%20Bearish%20Supply%20and%20Demand%20Signals_6.pdf)
https://www.eia.gov/energyexplained/gasoline/factors-affecting-gasoline-prices.php
https://www.treasury.gov/resource-center/data-chart-center/interest-rates/pages/textview.aspx?data=yield
https://www.natlawreview.com/article/biden-signs-largest-climate-and-resiliency-infrastructure-bill-us-history
https://www.cnbc.com/2021/11/19/house-passes-build-back-better-act-what-happens-next-in-the-senate.html
https://www.moodysanalytics.com/-/media/article/2021/macroeconomic-consequences-infrastructure.pdf
https://www.aei.org/economics/the-limits-of-infrastructure-spending-to-boost-economic-growth/
https://www.economist.com/finance-and-economics/2021/04/29/what-an-infrastructure-bonanza-could-mean-for-americas-economy (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2021/11-22-21_The%20Economist_What%20an%20Infrastructure%20Bonanza%20Could%20Mean%20for%20Americas%20Economy_13.pdf)
https://www.brookings.edu/research/how-federal-infrastructure-investment-can-put-america-to-work/
https://www.jdsupra.com/legalnews/infrastructure-investment-and-jobs-act-2678111/
https://www.cbo.gov/publication/57406
https://www.thebalance.com/who-owns-the-u-s-national-debt-3306124
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