Tesla, Bank of America, Netflix and more Banks Report this Week

Is the consumer still strong?

Good Morning ☀️😃🌞

As of yesterday I start my 54th year on planet earth and a day later, we start second quarter earnings season! This week we will hear from Tesla, Bank of America, Goldman Sachs, Morgan Stanely, and, of course many others.

Recession?

For the last 18 months we have only heard that we will be entering a recession or are in one. And if you look at the stock market and its returns year to date you would ask yourself, ‘what recession?’. The discussion I’ve had many times this year about the stock market and the economy is that they are two different entities. The fundamentals of our global economy are one and the stock market is another.

Over the last 13 or so years the stock market has become its own thing. Not based on the fundamentals of corporations and markets, but rather on momentum and derivatives. Many of the trades we will see today will you made by computers that have been programmed with algorithms that are driven by If, Then statements. If a headline about Tesla, or China comes across CNBC, markets will move in accordance with those headlines. Fundamentals pertaining to the movement stock prices and bond prices have been long gone. Yet when you start to look at the fundamentals of our economy, such as used car prices, you would see a different economy. Used car prices have declined as repossession have gone up. This is a sign that the consumer is not faring so well.

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