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7 charts from the past week that tell an interesting story in markets and investing…
1) Waiting for “Actual” Inflation
Fed Chairman Jerome Powell boosted markets this week in saying “We will not raise interest rates pre-emptively because we fear the possible onset of inflation. We will wait for evidence of actual inflation or other imbalances.“
In other news, Core PCE (the Fed’s preferred measure of inflation) rose 3.4% over the last year, the highest increase in prices since 1992.
2) Housing Boom 2.0
US existing home prices rose 24% in the last year, the highest rate of increase ever.
Over the last 10 years, prices have more than doubled, from $169,000 to $350,000.
New home prices also hit another record high in May, up 18% over the last year.
Meanwhile, the Fed continues to purchase mortgage-backed securities in an effort to hold rates down and stimulate the housing market, with assets now totaling over $2.35 trillion.
3) 3 Billion Doses a Year
Moderna ($MRNA) is rapidly expanding production capacity with a goal of tripling the annual output of its Covid-19 vaccine to 3 billion doses in 2022 from around 1 billion this year.
Its market cap now stands at a new high of $88 billion, up from $6 billion before the pandemic.
An amazing fact: Moderna’s vaccine was developed in just 2 days (by January 13, 2020) and had already been manufactured and shipped by the time the first American death was announced. Must Read: “We Had the Vaccine the Whole Time.”
4) Microsoft Joins the $2 Trillion Club
Microsoft ($MSFT) hit a $2 trillion market cap this week for the first time, joining Apple as the only other American company to have reached that feat. This is a 10x increase for Microsoft over the last 10 years as its market value stood at $200 billion in 2011.
Microsoft unveiled Windows 11 this week, its first update in 6 years. Windows remains the world’s most widely used PC operating system (1.3 billion devices) and the new version attempts to expand that reach with new Xbox features, integrating Microsoft Teams, and making Android apps available for the first time.
5) Crypto Crash
The downturn in crypto continued this week, with declines registered across all of the major currencies. Once again, news out of China (ordering miners to shut down operations and its central bank (PBOC) warning financial institutions not to provide cryptocurrency services) was labeled as the catalyst.
At its low, Bitcoin briefly turned negative on the year after having been up over 120% in mid-April.
6) Sneaker Surge
Nike ($NKE) shares hit an all-time high this week after the company reported blowout earnings with sneaker and apparel sales that trounced expectations.
Nike continues to see an explosion in direct-to-consumer activity, with digital sales up 41% over the last year and 147% versus 2019 levels.
7) Remote Work: Here to Stay
Many workers are now going back to the office in some capacity, but a return to the pre-covid work environment is unlikely.
As the poll I ran this week indicates, if given the choice, working from home is the preferred option for many employees, and perhaps a more productive option as well.
Marc Andreessen’s sentiments in a recent post (Technology Saves the World) echo this point, as working from home worked remarkably well from the very start the pandemic…
“The most positively shocking development was that virtually all knowledge work in the economy simply kept going. Of course, companies were forced to shut down physical production facilities such as car factories, and frontline workers bore the brunt of in person exposure to COVID throughout the pandemic. But consider this: Not a single significant company engaged in service provision — whether banking, insurance, communications, media, healthcare, you name it — had any downtime at all. Every knowledge worker went home, fired up their laptops, jumped on Slack and Zoom and Gmail and Github, and kept on going. I must have talked to a hundred CEOs through that initial period, and they were uniformly shocked at how well remote work worked, right from the start.”
And that’s it for this week.
Thanks for reading.
Have a great Sunday and week ahead!
-Charlie
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