There is a surcharge, sir

Stocks had a mixed close yesterday as investors just couldn’t decide whether strong economic numbers were good or bad. Fed policy makers are starting to sound more optimistic about inflation and the economy, though there are no guarantees… there never are in the stock market.

News from around the world. Good news if you live in New York City! It is not the most expensive city in the world, according to a newly released survey. It slipped to slot #2, which it shares with Geneva. The overtake was conducted by Singapore and Zurich which share the top spot. San Francisco rounds out the top 10, LA sits in seat number 6, Paris just behind it, and Tel Aviv ranks number 8. Super-expensive Hong Kong holds the middle spot of the upper echelon of wealth destruction. Do you live in one of these cities? I do, and I have visited a few of the others on the list, and I concur! There are times where I pay a check in NYC which literally makes my eyes water, even though I have been conditioned to expect it. There are times when my wife proclaims a “nothing fancy-shmancy” night, which is code for “NOT EXPENSIVE, PLEASE,” that almost always results in order-in or a local restaurant which costs what I would guess to be a half-year’s wages somewhere else in the country.

Well, I suppose I could stand to eat a bit less, and maybe save some money. I am told that one can save money by cooking at home. We do that most nights anyway because we simply like to cook. There are some savings there, but I can assure you that the grocery bill still causes me to take a deep breath. I am sure that you don’t need me to tell you about this as the cost of living in New York City is a time-honored favorite joke the world over. Joking aside, it is REAL, and this recent spate of inflation has only accentuated the painful reality of city living. It’s not just the food. Rents, home prices, transportation… everything, from haircuts to drycleaning to Botox treatments. Thankfully, I don’t require haircuts, and though I could probably use some Botox, I haven’t waded into that water yet. However, if I want to drive into Manhattan, as many people do to commute, and SPEND MONEY ON EXPENSIVE MEALS, New York City will soon greet you an additional $15 surcharge for driving anywhere below the mid-60s. You can take an Uber or a cab. In case you haven’t noticed they are not cheap either. They too, will be charged surcharge. Though it is likely to be less, do you want to guess who will ultimately pay the price of that surcharge? Yep! Have I gotten your heart racing yet?

Don’t worry, there is some good news. Inflation has been creeping lower. This morning WHILE YOU SLEPT, inflation data released in the Eurozone confirmed that inflation crept lower in the recent period. That is consistent with the inflation data in the US. This morning we will get a glimpse of the Fed’s favorite inflation number the PCE Deflator, which is expected to show a further slowdown in inflation across all readings. Indeed, if you listened to the recent parade of Fed policymakers speak, you would pick up on their noticeably softer tone on inflation. So, if this all persists and inflation gets closer and, ultimately, reaches the Fed’s target, will things just get back to normal? Well, it depends on what you consider to be normal. Have you ever noticed that when I write an inflation number that it is followed by a percent symbol? Remember that inflation is change in prices of a good or a basket of goods. That means that when we finally get to that blissful state where inflation is at the Fed’s +2.0% target, prices will only be climbing at +2% per year. Slower inflation does not mean lower prices, just slower growth of prices. What that ultimately means to me is a continued eye-watering when I dine out with my family in that city I love so much.

WHAT’S SHAKIN’ THIS MORNIN’

Salesforce Inc (CRM) shares are higher by +9.47% in the premarket after the company announced a strong EPS beat for last quarter. The company also raised its current quarter and full-year guidance. The company’s forward P/E is cheaper than its comps, but there are no guarantees that it will close the gap. Potential average analyst target upside: +16.7%.

Synopsys Inc (SNPS) shares are higher by +2.27% after the company announced that it beat EPS and Revenues by +3.88% and +0.89% respectively. The company provided current quarter and full-year guidance that was above analyst expectations and further reported that it is looking to potentially divest a business unit. In the past 30 days 66% of analysts have changed their price targets, 10 up, 0 down, 5 unchanged.

YESTERDAY’S MARKETS

NEXT UP

• Initial Jobless Claims (Nov 25) is expected to come in at 218k, slightly higher than last week’s 209k claims.
• Personal Income (Oct) is expected to have increased by +0.2% after climbing by +0.3% in September.
• Personal Spending (Oct) may have risen by +0.2% after rising by +0.7% in the prior period.
• PCE Deflator (Oct) is expected to have slowed to +3.1% from +3.4%.
• Pending Home Sales (Oct) are expected to have slipped by -2.0% after growing by +1.1% in the month before.
• MNI Chicago PMI (Nov) may have climbed to 46.0 from 44.0.