Your Weekly Blip 7/25/22

Your Weekly Blip 7/25/22

The Markets and Economy
The markets closed out Monday’s trading session mixed with the Dow up 21 at 31,920 while the NASDAQ fell 51 at 11,782. Market are still under pressure but appear to be holding at support as investors are cautiously digesting earnings reports.
Earnings reports are coming in better than expected however forward guidance is an issue with several companies posting lower than expected outlooks due to things like a labor and cost issues, strong US dollar, weak eurozone economic numbers and uncertainty over the war in Ukraine. The Federal Reserve is expected to meet next week and raise interest rates by 75 “bips”. I have seen some indications that inflation may be topping out and could moderate in the fall which is good since if true it could be indicative of a market bottom. Fidelity thinks that inflation will range from 3% to 5% for the next several years.
Tesla reported a 42% revenue increase and a 57% jump in net profits. The company continues to battle supply chain issues but demand for its cars is solid despite recent price increases. The Fremont, CA and Berlin factories each produced record numbers of cars while Texas continues to ramp up. Tesla increased its total deliveries by 27% in the quarter to 258,580 while the global vehicle inventory fell from 9 days to 4 days. The supercharger count grew 34% and finances at the company look good with cash levels rising to $18.3 billion smackers.
Oil prices continue to find support near the mid $90 to $100 per barrel level and some oil ticks are saying this could be the floor given all the upheaval in the global oil patch. One thing I have noticed is the increasing number of “Force Majeure’s” being called by various oil producers. Force Majeure is declared when something beyond the control of an oil producer prohibits the fulfillment of an oil or gas supply contract. It is referred to as an “act of God” and lately Libya, Russia’s Gazprom and Canada’s TC Energy have all declared Force Majeure which means they cannot meet supply commitments due to things beyond their control. This trend offers a glimpse of why oil prices could stay high for the long haul and how global turmoil is affecting energy markets.
Items of Interest
Big news here at Greystone. John’s beautiful wife Mariana gave birth to a son! Young Samuel came in at 6 lbs 15 ounces with a head full of hair and while he does not have a job yet I think Microsoft is about to make him an offer. Congrats to John and Mariana! Cleo and I are super happy.