We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The U.S. economy remains the major driver of the global economy.
How can I show you a few key macro nuances, within that 2024-era concept?
I. The U.S. Outlook
A. In a 1st chart, I show the dashboard for Zacks Inflation Expectations.
Ending the supply shock of COVID led to a spurt of goods price inflation.
Yet in 2024, as the bottom panel, with a “CPI-U All Items” consumer inflation time series shows, this run-up is clearly over.
Image Source: Zacks Investment Research
However, in 2024, the remaining stubborn U.S. rent inflation, in y/y terms, is what is now keeping this “CPI-U All-Items” time series running along at +3.36% y/y now.
A Fed Chair Powell COVID-era monetary policy mistake shows.
Zero rates were kept for too long. Monthly “QE” bond buying continued for too long. This led to a major depletion in U.S. housing inventories.
While 2024 U.S. house inventories are now climbing, they have a ways to go before reaching 2019 inventory levels.
That low level of housing inventory for sale puts pressure on the other major source of housing demand: rentals.
B. In a 2nd chart, another U.S. macro event of global significance is the run-up in U.S. Gross Domestic Investment in Equipment & Structures, due to the passage of the Infrastructure Act and the Chips Act.
A 2nd and final dual chart shows the run-up in the global industrial company Caterpillar’s (CAT - Free Report) share price, put up against U.S. Gross Private Domestic Investment in Equipment & Structures.
Image Source: Zacks Investment Research
II. The Zacks July 2024 Sector/Industry/Company Telescope
The July 1st, 2024 Zacks Industry Ranks showed a cyclical set-up endures.
There were two Very Attractive sectors: Info Tech and Industrials.
There were two Attractive sectors: Consumer Discretionary and Energy.
Zacks Industry Ranks showed a dominant group of five Market Weight sectors: Consumer Staples, Financials, Health Care, Utilities and Communication Services.
Materials was found at the back, as the sole Unattractive sector this month.
(1) Info Tech stayed Very Attractive. Semis & Misc. Tech led.
Onto Innovation operates as the leading global manufacturer of avant-garde process control tools that perform macro defect inspections and metrology, and lithography systems. Its products are used in a number of high technology industries like silicon wafer substrates, power device and data storage.
(2) Industrials stayed Very Attractive. Business Products, Conglomerates, Machinery – Electrical, and Construction – Building Services all looked strong.
Makita Corp manufactures portable electric power tools, hand-held vacuum cleaners and power saws. Their products include impact wrenches, band saws, groove cutters, hedge trimmers and weed cutters. They also make attachments and other parts along with performing repair work.
(4) Energy rose to Attractive from Market Weight. Energy - Alternates looked the best.
(5) Consumer Staples stayed a Market Weight. Food/Drug Retail and Soaps & Cosmetics were the strongest groups.
(6) Financials stayed at Market Weight. Banks - Major and Insurance looked best.
(7) Health Care stayed at Market Weight. Medical Products looked best.
(10) Materials fell to an Unattractive rating from Attractive. Paper was still strong.
III. Conclusion
I want to conclude with what the U.S. Bureau of Labor Statistics (BLS) shared with citizens, traders and investors alike on Wednesday July 10th, 2024.
“The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in May on a seasonally adjusted basis, after rising +0.3% in April, the U.S. Bureau of Labor Statistics reported today.
The All-Items index rose +3.3% for the 12 months ending May, a smaller increase than the +3.4% increase for the 12 months ending April. The All-Items less Food and Energy index rose +3.4% over the last 12 months.
“The index for All-Items less Food and Energy rose +0.2% in May, after rising +0.3% the preceding month.
Indexes which increased in May include shelter, medical care, used cars and trucks, and education
The indexes for airline fares, new vehicles, communication, recreation, and apparel were among those that decreased over the month
“More than offsetting a decline in gasoline, the index for shelter rose in May, up +0.4% for the fourth consecutive month.”
Enjoy the rest of my Zacks June 2024 Market Strategy report!
Warm Regards,
John Blank, PhD. Zacks Chief Equity Strategist and Economist
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
U.S. Still the Cornerstone to Global Growth: Zacks July Strategy
The following is an excerpt from Zacks Chief Strategist John Blank’s full Jul Market Strategy report To access the full PDF, click here.
The U.S. economy remains the major driver of the global economy.
How can I show you a few key macro nuances, within that 2024-era concept?
I. The U.S. Outlook
A. In a 1st chart, I show the dashboard for Zacks Inflation Expectations.
Ending the supply shock of COVID led to a spurt of goods price inflation.
Yet in 2024, as the bottom panel, with a “CPI-U All Items” consumer inflation time series shows, this run-up is clearly over.
Image Source: Zacks Investment Research
However, in 2024, the remaining stubborn U.S. rent inflation, in y/y terms, is what is now keeping this “CPI-U All-Items” time series running along at +3.36% y/y now.
A Fed Chair Powell COVID-era monetary policy mistake shows.
Zero rates were kept for too long. Monthly “QE” bond buying continued for too long. This led to a major depletion in U.S. housing inventories.
While 2024 U.S. house inventories are now climbing, they have a ways to go before reaching 2019 inventory levels.
That low level of housing inventory for sale puts pressure on the other major source of housing demand: rentals.
B. In a 2nd chart, another U.S. macro event of global significance is the run-up in U.S. Gross Domestic Investment in Equipment & Structures, due to the passage of the Infrastructure Act and the Chips Act.
A 2nd and final dual chart shows the run-up in the global industrial company Caterpillar’s (CAT - Free Report) share price, put up against U.S. Gross Private Domestic Investment in Equipment & Structures.
Image Source: Zacks Investment Research
II. The Zacks July 2024 Sector/Industry/Company Telescope
The July 1st, 2024 Zacks Industry Ranks showed a cyclical set-up endures.
There were two Very Attractive sectors: Info Tech and Industrials.
There were two Attractive sectors: Consumer Discretionary and Energy.
Zacks Industry Ranks showed a dominant group of five Market Weight sectors: Consumer Staples, Financials, Health Care, Utilities and Communication Services.
Materials was found at the back, as the sole Unattractive sector this month.
(1) Info Tech stayed Very Attractive. Semis & Misc. Tech led.
Zacks #1 Rank (STRONG BUY): Onto Innovation (ONTO - Free Report)
Onto Innovation operates as the leading global manufacturer of avant-garde process control tools that perform macro defect inspections and metrology, and lithography systems. Its products are used in a number of high technology industries like silicon wafer substrates, power device and data storage.
(2) Industrials stayed Very Attractive. Business Products, Conglomerates, Machinery – Electrical, and Construction – Building Services all looked strong.
Zacks #1 Rank (STRONG BUY): Enersys (ENS - Free Report)
Headquartered in Pennsylvania, EnerSys engages in manufacturing, marketing and distribution of various industrial batteries.
(3) Consumer Discretionary rose to Attractive from Market Weight. Publishing and Non-food Retail/Wholesale looked good.
Zacks #1 Rank (STRONG BUY): Makita (MKTAY - Free Report)
Makita Corp manufactures portable electric power tools, hand-held vacuum cleaners and power saws. Their products include impact wrenches, band saws, groove cutters, hedge trimmers and weed cutters. They also make attachments and other parts along with performing repair work.
(4) Energy rose to Attractive from Market Weight. Energy - Alternates looked the best.
(5) Consumer Staples stayed a Market Weight. Food/Drug Retail and Soaps & Cosmetics were the strongest groups.
(6) Financials stayed at Market Weight. Banks - Major and Insurance looked best.
(7) Health Care stayed at Market Weight. Medical Products looked best.
(8) Utilities stayed Market Weight. Utility - Telephone looked the best.
(9) Communications Services stayed at Market Weight. Telco Equipment stayed strong.
(10) Materials fell to an Unattractive rating from Attractive. Paper was still strong.
III. Conclusion
I want to conclude with what the U.S. Bureau of Labor Statistics (BLS) shared with citizens, traders and investors alike on Wednesday July 10th, 2024.
“The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in May on a seasonally adjusted basis, after rising +0.3% in April, the U.S. Bureau of Labor Statistics reported today.
The All-Items index rose +3.3% for the 12 months ending May, a smaller increase than the +3.4% increase for the 12 months ending April.
The All-Items less Food and Energy index rose +3.4% over the last 12 months.
“The index for All-Items less Food and Energy rose +0.2% in May, after rising +0.3% the preceding month.
“More than offsetting a decline in gasoline, the index for shelter rose in May, up +0.4% for the fourth consecutive month.”
Enjoy the rest of my Zacks June 2024 Market Strategy report!
Warm Regards,
John Blank, PhD.
Zacks Chief Equity Strategist and Economist