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Five Things You Need to Know: Everything Is Really, Really Good


What you need to know (and what it means)!


Minyanville's Five Things You Need to Know to stay ahead of the pack on Wall Street:

1. Everything is Really, Really Good

No matter how you slice it - CPI, PPI, commodity prices, the dollar, the euro, the yuan, stocks, bonds - everything is good. Really, really good.

  • We used to be skeptical about certain things, even pessimistic. Some even called us bearish... but not anymore.
  • Why? Well, call it a singular moment of vacation-induced clarity, if you will, or a good old fashioned revival of the bullish faith, but after Five Things had the opportunity to spend Five Days away from Minyanville reading the newspapers and watching television, we realized that everything is actually really, really good.
  • Naturally, you might think to yourself, "Self, if things are really so good, then why have stocks all over the world been declining?" The answer? One word, self: growth!
  • See, because global growth had been so strong, stocks worldwide surged!
  • And because global growth has been so very, very good, central banks the whole world over became worried about rising inflation and were forced FORCED to raise the cost of money.
  • So stocks have simply been declining due to economic growth!
  • That's all this is, see, a little tough love.
  • Once central bankers around the world get this excessive growth thing under control, we can resume the upward march of stock prices worldwide. Even for the SENSEX!
  • This is just some of what we learned during our little vacation. Below, see even more of the amazingly good news we learned while we were on vacation.

2. Consumer Prices Are Higher, But That's Actually Great News!

US consumer prices for May came in at 0.4%, a lot less than the 0.6% they rose in April!

  • Core consumer prices rose for a third straight month.
  • The CPI increased by 0.4%, but hey, that's less than last month's 0.6%.
  • Now, being a skeptic, you might reasonably point out that the Fed's closely watched "personal expenditures index" came in at 2.1% - higher than Fed's preferred 1-2% range.
  • And, you might also reasonably say, "Hey, what about the surge in owners' equivalent rents? It's up 0.6%, the highest since 1990."
  • Ah, but see, we're not afraid to reach down, deep down into our skeptic tanks and point out that this is actually all really good because it helps slow housing growth!
  • And, admittedly, housing was getting close to a bubble in a few very select areas that are not wherever you happen to be!

3. If You Build It, They Will Come... But (Again, Great News) Not Pay!

Great news (again). Yesterday the Labor Department reported prices for finished goods were up 0.2% while the core Produce Price Index rose 0.3%.

  • The headline number for the Produce Price Index rose a slight 0.2% last month, below expectations of 0.4%.
  • But the so-called "core" PPI was up a bit more than expected to 0.3%.
  • The core figure is important because it shows pricing pressures building at the producer level.
  • For May core intermediate prices were up 6.3% year-on-year.
  • However, prices for finished consumer goods other than food and energy were up only 0.2%!
  • Also, with commodities prices declining worldwide (copper down 20%, gold, silver, lead, zinc, rubber, corn, etc. all lower this month) it's only a matter of time before producer prices from commodities pressures ease too. And that would be a good thing (again).

4. The Consumer Isn't Dead... She's Only Sleeping!

According to the US Commerce Department, retail sales were up a mere 0.1% from April, a sign that the consumer is tapped out?

  • Oh c'mon, you cannot be serious! Tapped out?
  • Didn't you catch the rest of the story? Retail sales were up 7.6% from a year ago!
  • And April's report was revised upward.
  • Also, didn't you notice last week that Consumer Credit in April was up the most in 10 months? That's great news!
  • Overall consumer spending grew 5.2% in the first quarter.
  • Man, people sure like to worry a lot.

5. More Good News!

OK, here's the deal. Basically, what Five Things learned while away for five days, was how to take any piece of news, any data, and make it good! Don't believe us? We'll prove it. Below are five "bad news" headlines from this morning's sources. Check out the before "bad news" headlines and the after "good news" headlines below.

Special Five Things Preview: Tomorrow, Reality.

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No positions in stocks mentioned.

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