Braeburn Observations
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June 14, 2021 www.braeburnwealth.com Braeburn Observations Michael A. Poland, CFA® Wealth Advisor / Portfolio Manager LOWRY’S 6/11/2021 (MSCI), emerging markets retreated low of 1.8%. -0.8%, while developed markets Small business owners reported the While there is no broad all-clear added 0.5%. signal, the improving balance of labor shortage across the nation is Supply and Demand suggests that holding back growth. The National selective buying is now warranted. U.S. ECONOMIC Federation of Independent Business (NFIB) stated its small-business index NEWS fell for the first time this year over U.S. MARKETS The number of job openings rose to growing labor and inflation worries. A sharp decrease in longer-term bond a record high, but employers say they The index slipped 0.2 points to 99.6. yields appeared to help push the S&P can’t find enough workers to fill them. Business owners say they are losing 500 Index to a record high in a week The Labor Department reported job sales because they can’t find enough of relatively light summer trading. openings soared to 9.3 million in people to fill open positions. And The technology-heavy NASDAQ April, from a revised 8.3 million in the now, rising inflation is adding to Composite Index outperformed, prior month. Many companies, both their worries. In the details of the rising 1.8% to 14,069, marking its big and small, have reported difficulty report, NFIB - the nation’s largest fourth consecutive weekly gain, while small-business lobbying group - said the narrowly focused Dow Jones finding qualified workers. The Industrial Average recorded a modest surprising difficulty in getting people a record 48% of small businesses loss of -0.8% closing at 34,480. By to return to work is tied to a number surveyed could not fill open jobs, even market cap, the large cap S&P 500 of problems, economists say. They with many of them offering higher rose 0.4%, while the mid-cap S&P 400 blame a wave of early retirements, a pay. “The labor shortage is holding and small-cap Russell 2000 finished lack of child-care options, a lingering back growth for small businesses the week up 0.9% and up 2.2%, fear of the coronavirus and generous across the country,” said NFIB chief respectively. unemployment benefits. To add economist Bill Dunkelberg. The fuel to the fire, a record number of businesses that have raised wages people are quitting their jobs. Nearly in an effort to lure more workers say INTERNATIONAL 4 million people quit in April—double they plan to pass higher labor costs MARKETS the number from the same time last on to customers, potentially adding year. The so-called “quits rate” rose a upward pressure to U.S. consumer Canada’s TSX rose 0.5%, while the prices. The percentage of businesses United Kingdom’s FTSE added 0.9%. tick to a record 2.8% among private- sector employees. The quits rate is raising prices rose to the highest level On Europe’s mainland, Frances CAC since 1981. 40 rallied 1.3%, while Germany’s DAX rumored to be the Federal Reserve’s finished the week unchanged. In Asia, preferred gauge of the health of the The cost of living surged again last China’s Shanghai Composite ticked labor market as it is assumed that an month, as the pace of inflation soared down -0.1% and Japan’s Nikkei rose employee would only quit a job in to a 13-year high of 5%, reflecting just 7 points to 28,949—a negligible favor of a more lucrative one. At the the broad increase in prices across percentage gain. As grouped by height of the coronavirus crisis, the the U.S. economy. The consumer Morgan Stanley Capital International quits rate had fallen to a seven-year price index jumped 0.6% last month Continued on page 2 The Braeburn Observations is our means of sharing with clients and interested parties what it is we are reading in our research. These are research items, news and statistics 111 W. Western Avenue that are being considered as we make investment decisions for our clients. Items Muskegon, Michigan 49442 noted do not necessarily drive an investment decision in and of itself. We are trying 231.720.0743 Main to make the best decisions we can given all that we are looking at. We also highlight key financial metrics that will provide a “point in time” glimpse of how the financial 866.577.9116 Toll free markets are behaving. Again, it is often the trend in these metrics and/or anticipated i n f o @ b r a e b u r n w e a l t h . c o m movements that drives our decision making in our clients’ portfolios. All observations are taken at a point in time and should not be used to infer our opinion or to rely upon as a matter of fact that we are currently acting upon. Investment advisory services offered through Braeburn Wealth Management, an SEC Registered Independent Advisor. page 2 Braeburn Observations www.braeburnwealth.com [email protected] Continued from page 1 to mark the fourth large gain in a row, U.S. and global economies regain a from 89.4 last month, due to rapid job the government reported. Economists more normal footing. The upsurge in gains in recent months. Consumer had expected a gain of 0.5%. The inflation is mostly tied to temporary optimism about the next six months rate of inflation over the past year shortages that will fade away as supply rose to 90.6 in May to 89.4 in the prior escalated to 5% from 4.2% in the prior catches up to demand, senior Fed month. In a note to clients, Robert month. That put it at the highest level officials say. Frick, corporate economist with Navy since 2008, a time when the cost of Sentiment among the nation’s Federal Credit Union wrote, “June’s oil hit a record $150 a barrel. Prior to consumers rebounded this month Consumer Sentiment Survey was that, the last time inflation was this after falling precipitously in May. mixed, just like how the recovery is high was in 1991. Another closely The University of Michigan reported playing out. While consumers are watched measure of inflation that its (preliminary) index of consumer rightly frustrated with the current omits volatile food and energy also sentiment rose 3.5 points to 86.4 high price of houses, cars and durable shot up 0.7% in May. The so-called this month. Economists had forecast goods, they recognize that job growth “core” 12-month rate of inflation a reading of 84.4. In the report, has finally started moving decisively in climbed to 3.8% from 3%, a 29-year the sub-index that measures how the right direction.” high. The Federal Reserve insists consumers feel about the economy price pressures will subside once the right now rebounded to 90.6 in June Stock Trader’s Almanac – A unique annual publication created by Yale Hirsch About Our Research Sources in 1967. The almanac is a treasure trove of insightful research originating such Barron’s – Since 1921 Barron’s has provided investment analysis and insight in important phenomena as the “January Barometer,” the “Santa Claus Rally,” and its weekly publication and, in recent times, it’s continuously updated web site. “Sell in May and Go Away.” It includes data backing, historically proven, cyclical Barron’s provides a wide range of perceptives, expert analysis and interviews and seasonal tendencies. with financial and investment professionals. The Fat Pitch - an acclaimed blog that the Business Insider ranks on their annual Investor’s Business Daily (IBD) – A daily newspaper designed for the individual list of the Top Finance People to Follow. 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