Yesterday, the market edged higher, mostly on muscle memory, as eight of eleven sectors finished in the plus column: 

S&P 500 Index	+0.24%
Communication Services XLC	+0.52%
Consumer Discretionary XLY	+0.74%
Consumer Staples XLP	+0.17%
Energy XLE	+2.47%
Financials XLF	+0.58%
Health Care XLV		-0.65%
Industrials XLI		-0.05%
Materials XLB	+0.84%
Real Estate XLRE	0.00%
Technology XLK		-0.05%
Utilities XLU	+0.03%

It’s bizarre that not a single stock in the Energy sector is changing hands above their 50-day moving average. And only 25% of Materials and 29% of Financials are above that key metric. So, there has to be an opportunity there, but concern over lack of strength.

Tesla  (TSLA)

• Revenue: $11.96 billion
• Regulatory Credit Revenue: $354 million
• Earnings Per Share (EPS): $1.45 consensus $0.97
• Capitalization Expenditures (CapEx): $1.51 billion, consensus $1.15 billion

It was legitimately a solid report, which deliveries edging to a new record, and Elon Musk, noting U.S. demand is so high that the company’s Shanghai Gigafactory will be an export hub.

TSLA shares initially rallied 3.5% - it will be interesting to see if the stock can breakout through the recent trendline.

Dallas Fed

The Dallas Fed edged lower to 27.3 from 31.1 and Wall Street’s consensus of 31.6. This was the fourth consecutive monthly decline, but the report was titled: Robust Expansion in Texas Manufacturing Carries On

The month-to-month slide, coming in a few components of the report:

• New Orders: 26.8 was unchanged
• General Business: 27.3, down 4% points
• Outlook: 22.3, down 5% points
• Production: 31.0 unchanged

Special questions in the report give insight to solid growth but issues, including staffing up.

Firm’s current revenues compare with a typical July?	May '20 (percent)	Aug. '20 (percent)	Nov. '20 (percent)	Feb. '21 (percent)	Jul. '21 (percent)
Firms reporting increased rev	10.2	18.3	19.9	23.3	35.8
Average revenue increase (Y/Y)	20.1	17.6	17.7	15.8	16.3

 

Are you currently trying to hire or recall workers?	Apr. '21 (percent)	Jun. '21 (percent)	Jul. '21 (percent)
Yes	60.1	60.3	68.7

As federal unemployment runs out, there are still glaring hurdles to getting folks to work. However, there is a spike in folks looking for more pay than is being offered and trouble passing a drug test and background checks.  Very few cite fear of COVID-19 or childcare, which politicians tell us are key factors to the Workers’ Strike.

Impediments to hiring or recalling workers? Select all that apply.	Apr. '21 (percent)	Jun. '21 (percent)	Jul. '21 (percent)
Lack of available applicants/no applicants	66.7	70.4	75.9
Workers looking for more pay than is offered	33.8	42.5	40.8
Generous unemployment benefits	47.7	47.3	39.6
Lack of technical competencies (hard skills)	41.2	37.2	35.1
Lack of experience	38.4	30.1	32.2
Lack of workplace competencies (soft skills)	26.9	27.0	25.7
Inability to pass drug test and/or background check	19.9	21.7	22.9
Lack of childcare	11.6	13.3	11.4
Fear of COVID-19 infection	8.3	8.4	6.5
Other	10.6	6.2	7.8

Today’s Session

Durable Goods +0.8 against consensus +2.0

Business investments +0.5 from +0.5 (revised from +0.1)

Biggest increases

• Nondefense aircraft and parts 17%
• Communication equipment 6.4%
• Transport equipment 2.1%

Red Book US Retail Sales

The market looks a bit vulnerable this morning.

Comments

Hummmm! Lot's of info Charles, thank you. Lorin K on 7/27/2021 10:35:38 AM

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