David Ross

What I think I learned last week #32

US inflation rose at the fastest pace in a year as core consumer prices rose 2.1% in March. Additionally, producer prices also rose 0.3%, ahead of the expected 0.1% rise.

After Trump announced he was sending nice and new and smart missiles to Syria over Russian objections, oil prices jumped to their highest levels since December 2014 as Brent hit $72.94, marking a three day advance of 9%.

OPEC cut oil production in March by 201,000 barrels a day. However, the world’s total oil supply rose by 180,000 barrels a day because of higher production from non-OPEC countries like the UK, Norway and the US.

A combination of sanctions and Trump missile threats led to Russian equities suffering their worst session in four years last week. The ruble fell to its lowest level since 2016.

Turkey’s lira joined the crumbling currency parade, hitting all-time lows against the US dollar and the euro.

Suggesting that economic growth in China is slowing, Chinese producer prices hit a 17 month low in March.

Japan’s machinery orders, however, jumped 2.1%, confounding experts who predicted a 2.5% drop.

The US Federal Reserve is optimistic about economic growth. The minutes from the March meeting were released and showed that “all” participants expected the economy to strengthen in coming months.

Wage inflation seen in Japan. Online shopping site Zozotown is looking to hire seven “genius” tech experts. They are offering million dollar annual salaries for workers in areas such as cryptography, robotics and artificial intelligence.

Japan also is telling us that so-called rare earth metals are not that rare as they found deposits that are being called “semi-infinite” because they are expected to meet demand for 780 years.

Soybean powerhouse Argentina, the third largest grower of soybeans after the US and Brazil bought 240,000 tons from the US over two days last week in order to meet export commitments.  This was the biggest purchase in twenty years.

The Eurozone’s private-sector debt has surged to such high levels that regulators are starting to worry, noting that there has been no decline in Eurozone private debt since the financial crisis. According to the Wall Street Journal, “Over $1 trillion of loans outstanding is considered nonperforming and continues to weigh in on the books of European banks, which have assumed actual losses half of that amount.”

Debt is everywhere as the head of the IMF, Christine Lagarde, expressed concern about rising global debt levels that have soared to 220% of global output.

Are stocks still expensive? According to the Wall Street Journal, with the S&P 500 this month at its lowest level since mid-2016 relative to expected earnings over the next 12 months stocks may be cheap.

US bank stocks got cheaper on Friday as earnings failed to excite investors as. Citibank, JPMorgan, Wells Fargo and PNC all dropped 2%-3%.

And that’s what I think I learned last week….