It’s long been said that Wall Street loves divided government because nothing gets done.  This means less reckless spending and onerous rules that harm the wheels of commerce.

There is a fair amount of truth to this, but what we got from the current Congressional session has been appalling.

 Even more shocking is the news that Nippon Steel is buying US Steel (X) for more than $14.0 billion.

We know Wall Street loves takeovers, and there is an economic school that applauds the offshoring of industries, because it can often fatten corporate profits.

But this seems not only unpatriotic, but dumb. And it makes me wonder if we learned nothing during the pandemic waiting on piers for ships to bring use essentials like toilet paper and medicines developed in America.

Economic purists hated the Trump steel tariffs, but even their own work showed sharp improvement in production capacity.

Right now, the do- nothing Congress is mostly tight-lipped about the potential deal.

I know some see the industry as dirty, and old school, and say good riddance.  They also hate plastic, and I’m wondering what material they see replacing either of them, which are in great supply

There is also a segment that associates steel companies with the old Robber Barrons.  The fat cats were blamed for everything except ushering America into the 21^st century and propelling it to the most powerful economy ever seen, and at the same time expanding the middle class.

This kind of thinking, along with sending jobs to China, and elsewhere, caused manufacturing employment to peak in the late 1970s.  It’s been in a death spiral, along with hopes- replaced by drug addiction and suicides.

I never thought I would do this, but I must give a huge shout out to Senator Fetterman.  He has been missing in action for several reasons, but he is wide awake on this – I just wonder why his colleagues aren’t.

This is the wokism we need at this critical moment in time…

The Market

It’s always fascinated me that surveys and government data have far more influence on the stock market than hard news and data from corporate America.

On that note, earnings shortfalls and weaker guidance is roiling shares of:

• Winnebago (WGO)
• General Mills (GIS)
• FedEx (FDX)

I get that the RV craze during the pandemic has given way to the travel craze, but I figured people are still eating Cheerios, and I know we are getting more packages delivered than ever before.

There is a sense that FDX is losing share to competitors, but the business should be large enough to prevent the kind of declines in its US business segment seen last quarter.

The market did open lower on these headlines, but not by much, and the buy on the dip crowd quickly moved in on the economic data.

Existing Home Sales

The annualized pace of new home sales edged up +0.9%, which is much better than consensus of -4.1%, but the 3.82 million pace is still near multi-decade lows.

Sales were down from a year ago only with the million dollars homes (+13.4%) and the $750,000+ homes were (+5.7%) higher.   The median existing-home sales price rose 4.0% from a year earlier to $387,600 – the fifth consecutive month of year-over-year price increases.

But the big market mover was Consumer Confidence, which climbed to 110.7 from 101 in November.

• The Present Situation Index - rose to 148.5 from 136.5 last month.
• The Expectations Index - leaped to 85 from its downwardly revised 77.4 in November.

 

Comments

If companies I own paid dividends in 2008 and 2020 worst economic conditions than and now 2023 cutting their dividends, something is wrong, economy is good is just an illusion? James on 12/22/2023 10:43:01 PM

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