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The Newsletter

Animal spirits are driving momentum across the economy, especially in capital markets. There’s hundreds of billions of dollars waiting to be invested via vehicles like SPACs. Valuations are extreme, yet they are justified by low interest rates. Meanwhile demand is exceeding supply in industries like semi-conductors, housing and transport. Companies are citing inflationary pressures. But the Fed and Treasury are united behind continued stimulus. “We have the tools to deal with that risk.”

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The Newsletter

Markets went haywire last week thanks (so the story goes) to some retail traders in a Reddit forum led by a man named Roaring Kitty.  It was hard to pay attention to much of anything else in capital markets, but it was also a busy week for earnings. Industrial companies said that demand was “very, very, very strong” and there was an abundance of commentary on price pressures. Jerome Powell isn’t worried though. Game on!

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The Newsletter

Succinct Summary: Vaccinations are happening around the US and the world.  It’s been a little slower than hoped but that may be because of the logistical challenges of administering vaccines at long-term care facilities.  We are on the cusp of mass dissemination, and there should be enough capacity to make sure that the population is vaccinated quickly. We’ve lost a year of our lives to COVID but the finish line is (hopefully) in sight. Vaccination should unleash a huge amount of pent up demand. Banks, which started to report this week, have showed that credit performance metrics have been better than anyone dreamed possible in March of 2020. They’re releasing reserves and preparing to return capital to shareholders. Tech spend is also booming.

Something New: We launched a new podcast last week where we discuss the top quotes and ideas from the earnings transcripts we read.  It is now available on Apple Podcast, Google Podcast and Spotify and other podcast platforms. Subscribe and give us a review. We hope to be sending a new episode out every Tuesday. 

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The Newsletter

The Year in Review: 2020 was an unprecedented year and The Transcript covered the economy throughout all of its twists and turns. Even though China was battling Covid in 2019, no one really knew what was in store for all of us in 2020. Technology, capital markets, and housing were three industries that boomed. While the stimulus was integral, the economic hero of 2020 was the US consumer. Optimism is high that 2021 will be a more normal year.

Editor’s Request: This weekly newsletter is made possible by donations from our readers. If you like what you are reading, click here to donate (Our suggested donation: $10 per month). Help us keep The Transcript going.

 

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The Newsletter

Succinct Summary: It was hard to pay attention to anything other than politics last week, but we’re trying our best to keep a focus on the economy. Economic activity appears robust from the earnings reports that we’re reading. Even the hardest-hit industries appear to be performing much better than expected. The tech industries that surged may be normalizing though. We’re getting a strong new surge in Covid cases, but people seem to feel more prepared than they did last spring.

Editor’s Request: This weekly newsletter is made possible by donations from our readers. If you like what you are reading, click here to donate (Our suggested donation: $10 per month). Help us keep The Transcript going.

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The Newsletter

Succinct Summary: The economy continues its two speed recovery, but there are some signs that growth may be slowing.  Even companies that benefitted from the pandemic, like Netflix, are seeing the after-effect of demand that was pulled forward to earlier in the year.  Elections will be a key source of uncertainty in the coming weeks.  And COVID infections are stubbornly high.  But consumers are going crazy at home.

Editor’s Request: This weekly newsletter is made possible by donations from our readers. If you like what you are reading, click here to donate (Our suggested donation: $10 per month). Help us keep The Transcript going.

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The Newsletter

Succinct Summary: The economy has had a strong but incomplete recovery.  The worst seems to be over but there’s still a long way to go.  For many industries, this looks like a K shaped recovery.
Editor’s Request: This weekly newsletter is made possible by donations from our readers. If you like what you are reading, click here to donate (Our suggested donation: $10 per month). Help us keep The Transcript going.

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The Newsletter

Succinct Summary: The economy has improved a lot since the bottom, and headline economic activity is nearing a full recovery.  However, the recovery has not been shared equally.  There have been a small number of big economic winners and a much larger number of economic losers from COVID.  This will help keep the government pushing for more stimulus for a long time.  In the past, this stimulus has tended to help the winners even more.

Editor’s Request: This weekly newsletter is made possible by donations from our readers. If you like what you are reading, click here to donate (Our suggested donation: $10 per month). Help us keep The Transcript going.

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The Newsletter

Succinct Summary: The last week of summer before labor day is usually one of the slowest weeks of the year but this year it feels like things are moving at an incredibly fast pace.  Companies are looking to the future and beginning to permanently rationalize their cost structure.  Business travel budgets are likely to be cut for a long time.  Temporary layoffs are also becoming permanent.  In the near term economic activity is still very strong though.  We’re seeing a terrific end of the summer.  And the Fed is hoping it stays that way in the fall.

Editor’s Request: This weekly newsletter is made possible by donations from our readers. If you like what you are reading, click here to donate (Our suggested donation: $10 per month). Help us keep The Transcript going.

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The Newsletter

Succinct Summary: There were a lot of major data points about the economy last week but the biggest news of all seemed to be just how well tech companies did despite the massive economic dislocation.  In a quarter where GDP fell at a 33% annualized rate, Apple managed to grow revenue by 11%!  Stimulus probably played some role in tech companies’ strong performance, but beyond the stimulus is the fact that COVID has pushed everyone to spend even more time at home and on the internet.  The behavioral shifts appear to be long-lasting too.  20 years after the dot com bubble, the internet is still not done reshaping society.

Editor’s Request: This weekly newsletter is made possible by donations from our readers. If you like what you are reading, click here to donate (Our suggested donation: $10 per month). Help us keep The Transcript going.

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