Good morning.
The S&P is down just slightly now but coming off a record close as the bull, long rumored to be tiring, continues to jog happily along.
There is an old saying that: “if all you have is a hammer, everything looks like a nail,” which refers to the use of one tool to solve all your problems. While, of course, inside the toolbox of the United States there are certainly more items than a hammer, the president seems to use one tool (tariffs) repeatedly in the attempt to remind others just who happens to be holding the hammer. And it’s a big one, at that.
There are, of course, a few effects … brought on by even the mere threat of tariffs … and one of the main ones is inflation as quite a few who have not been educated at Wharton see rising costs to be a result.
One group certainly not smiling now-a-days are homebuilders … where “sentiment” (as reported by CNBC) is on the decline while those focused on existing single-family homes are showing confidence erasing an entire year’s gains.
It is not only concern over the effects of tariffs affecting homebuilders … nor is it fear that an important import (lumber) could slow … but, as shown in a graph produced by CoreLogic, the number of homes being “delisted” are sharply on the rise to a level not seen in around 10 years.
And we need to keep in mind what happened the last time homebuilding softened (noting that I am using my memory on this one). Construction people left the industry and when the call went out to start building again, there seemed to be a shortage of those with capable carpentry skills.
Before I forget, I did go to Costco yesterday … and was not surprised to find no eggs available (though it was the afternoon). This led me to have little hope to find any at Target last night, but lo-and-behold … there they were. Sure, I paid around $9 for 18 eggs … but I’m not complaining .. as it was cheaper than expected and they were surprisingly available.
I don’t usually go food shopping at Target … but did make the exception and was glad I did.
What I noticed in the food aisles was that there were very few women … and it appeared to be populated mostly by grey-haired men … each (including me) wearing sweaters that seemed one or more sizes too small.
As you get older, people’s choice of dress becomes similar … and it seems that everyone my age wears sweaters a bit snug.
That seems to be our uniform.
We are, obviously, a tight-knit community.
Have a great day,
Joseph G. Witthohn, CFA
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