Morning Report: Inflationary expectations increase.

Vital Statistics: Stocks are higher despite some hawkish comments out of Jerome Powell yesterday. Bonds and MBS are up. Bonds got hit yesterday on a lousy 30-year auction and hawkish comments out of Jerome Powell. At an IMF conference, Powell said: “The Federal Open Market Committee (FOMC) is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time; we are not confident that we have achieved such a stance. We know that ongoing progress toward our 2 percent goal is not assured: Inflation has given us a few head fakes. If it becomes appropriate to tighten policy further, we will not hesitate to do so. We will continue to move carefully, however, allowing us to address both the risk of being misled by a few good months of data, and the risk of overtightening. We are making decisions meeting by meeting, based on the totality of the incoming data and their implications for the outlook for economic activity and inflation, as well as the balance of risks, determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time. We will keep at it until the job is done.” The 30 year auction at a -5.3 basis point tail, the highest on record. Primary dealers bought nearly a quarter of the issue (double normal) as foreign demand evaporated. Consumer sentiment fell for the fourth straight month, according to the University of Michigan Consumer Sentiment Survey. We saw a divergence in sentiment amongst income groups, with higher income groups improving based on asset prices, while lower income groups are getting hit by inflation. Importantly, the year-ahead inflationary expectations ticked up from 4.2% to 4.4%, indicating that the big jump in October (from 3.2% to 4.2%) was not just an outlier. Long-run expectations increased as well to the highest since 2011. Blame high gasoline prices on the increase. On this Veteran’s Day, I want to share a sea story. I was on the USS Gridley (CG-21) in the Persian Gulf at the end of Desert Storm (early 92). The combat part was over, but we still kept a Tomahawk shooter in the Northern Persian Gulf. The job of the USS Gridley was to defend the Tomahawk shooter (typically a Spruance class destroyer) from air attack. Anyway, defending a Spruance destroyer is a pretty boring job. We were assigned a 8 nautical mile box and would lazily steam back and forth in it, all while dodging fishing boats, oil rigs, and tankers. One morning, the Middle East commander ordered us to investigate a distress signal in the Arabian Sea. We left the Northern Persian Gulf and headed through the Straits of Hormuz. We eventually found the ship that made the call. It was a Somali cargo ship with a ton of people on it. We couldn’t communicate with the ship, so we sent a couple of engineers in a small boat to take a look at it and see if they could fix it. The seas were really rough, and doing loops around the ship while we waited for the verdict from the engineers was a pain. The engineers reported back that the diesel engine had somehow lost its oil and it was ruined, like cylinder-lining-in-the-sump. Unfixable. We reported back to the ME Commander who ordered us to tow the thing back to Somalia. To pass a rope between ships, you fire a shot line (basically an orange bobbin with strong thread) from a rifle, then attach a 1 inch rope to that (called the messenger line) and then attach the towline (which is 5 inches in diameter and heavy as hell). The towline does the work. We pass by the ship, and our guy on deck pulls out the rifle and shoots the line over. Everyone on the deck of the Somali ship watches the orange bobbin fly over their heads. Then they look back at us with a “What the hell are you weird Americans doing?” look on their faces. We yell back “PULL! PULL!” They don’t speak English and they don’t get that they are supposed to pull on the orange line. By this time, the orange line has slipped off the Somali ship and we had to make another pass. Remember, these are ships, not Ferraris and getting close for a loop around in rough seas takes a while. So this time, we pass by slowly, shoot the line over, and pantomime pulling. Luckily the light bulb goes off on the other ship and they start pulling on the shot line. They pull the shot line up, grab the 1 inch messenger line and tie it to the bow and signal they are ready to go. They don’t realize there is another rope tied to the 1 inch rope. Towing a 8,000 ton ship with a 1 inch line is like towing a car with twine. We pantomime pulling again. They don’t get it. We finally get them on the radio. We pass the word on the ship for anyone with foreign language skills to report to the bridge. That covered Spanish and Tagalog. No dice. We call up the intel weenies. Get an Arabic speaker, but the Somalis don’t understand. We finally gave up and towed the ship with the messenger line. We go slowly (like 1.5 knots) and take them back to Mogadishu. It took us forever to get back. When we finally got them to port, we asked the Port Manager where he wanted these guys. He didn’t want them and told us to take the ship somewhere else. We didn’t want a diplomatic incident, so we called up the Commander of the Middle East and told him the story. We were told to just leave them anyway. We told Mogadishu ”the Adele II is your headache now.” The Adele II dropped anchor, and we headed back to the Persian Gulf. In our wrap-up report to the Commander Middle East, we included a “lesson learned” – translate “Heave Around” in every known language. I am accepting ads for this blog if you would like to make an announcement, highlight something your company is offering or want more visibility. I am running a special for new clients as well. I offer white-label services which give you the ability to use this content for your own daily emails. The blog has thousands of subscribers / followers and an open rate around 50%. Please feel free to reach out to brent@thedailytearsheet.com if you would like to discuss this further. [Image] Here are Some More Investing Tips and Resources. Enjoy! Sponsored [Click here to reserve your seat now!]( style=) [Morning Report: Inflationary expectations increase.]( Vital Statistics: Stocks are higher despite some hawkish comments out of Jerome Powell yesterday. Bonds and MBS are up. Bonds got hit yesterday on a lousy 30-year auction and hawkish comments out of Jerome Powell. At an IMF conference, Powell said: “The Federal Open Market Committee (FOMC) is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time; we are not confident that we have achieved such a stance. We know that ongoing progress toward our 2 percent goal is not assured: Inflation has given us a few head fakes. If it becomes appropriate to tighten policy further, we will not hesitate to do so. We will continue to move carefully, however, allowing us to address both the risk of being misled by a few good months of data, and the risk of overtightening. We are making decisions meeting by meeting, based on the totality of the incoming data and their implications for the outlook for economic activity and inflation, as well as the balance of risks, determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time. We will keep at it until the job is done.” The 30 year auction at a -5.3 basis point tail, the highest on record. Primary dealers bought nearly a quarter of the issue (double normal) as foreign demand evaporated. Consumer sentiment fell for the fourth straight month, according to the University of Michigan Consumer Sentiment Survey. We saw a divergence in sentiment amongst income groups, with higher income groups improving based on asset prices, while lower income groups are getting hit by inflation. Importantly, the year-ahead inflationary expectations ticked up from 4.2% to 4.4%, indicating that the big jump in October (from 3.2% to 4.2%) was not just an outlier. Long-run expectations increased as well to the highest since 2011. Blame high gasoline prices on the increase. On this Veteran’s Day, I want to share a sea story. I was on the USS Gridley (CG-21) in the Persian Gulf at the end of Desert Storm (early 92). The combat part was over, but we still kept a Tomahawk shooter in the Northern Persian Gulf. The job of the USS Gridley was to defend the Tomahawk shooter (typically a Spruance class destroyer) from air attack. Anyway, defending a Spruance destroyer is a pretty boring job. We were assigned a 8 nautical mile box and would lazily steam back and forth in it, all while dodging fishing boats, oil rigs, and tankers. One morning, the Middle East commander ordered us to investigate a distress signal in the Arabian Sea. We left the Northern Persian Gulf and headed through the Straits of Hormuz. We eventually found the ship that made the call. It was a Somali cargo ship with a ton of people on it. We couldn’t communicate with the ship, so we sent a couple of engineers in a small boat to take a look at it and see if they could fix it. The seas were really rough, and doing loops around the ship while we waited for the verdict from the engineers was a pain. The engineers reported back that the diesel engine had somehow lost its oil and it was ruined, like cylinder-lining-in-the-sump. Unfixable. We reported back to the ME Commander who ordered us to tow the thing back to Somalia. To pass a rope between ships, you fire a shot line (basically an orange bobbin with strong thread) from a rifle, then attach a 1 inch rope to that (called the messenger line) and then attach the towline (which is 5 inches in diameter and heavy as hell). The towline does the work. We pass by the ship, and our guy on deck pulls out the rifle and shoots the line over. Everyone on the deck of the Somali ship watches the orange bobbin fly over their heads. Then they look back at us with a “What the hell are you weird Americans doing?” look on their faces. We yell back “PULL! PULL!” They don’t speak English and they don’t get that they are supposed to pull on the orange line. By this time, the orange line has slipped off the Somali ship and we had to make another pass. Remember, these are ships, not Ferraris and getting close for a loop around in rough seas takes a while. So this time, we pass by slowly, shoot the line over, and pantomime pulling. Luckily the light bulb goes off on the other ship and they start pulling on the shot line. They pull the shot line up, grab the 1 inch messenger line and tie it to the bow and signal they are ready to go. They don’t realize there is another rope tied to the 1 inch rope. Towing a 8,000 ton ship with a 1 inch line is like towing a car with twine. We pantomime pulling again. They don’t get it. We finally get them on the radio. We pass the word on the ship for anyone with foreign language skills to report to the bridge. That covered Spanish and Tagalog. No dice. We call up the intel weenies. Get an Arabic speaker, but the Somalis don’t understand. We finally gave up and towed the ship with the messenger line. We go slowly (like 1.5 knots) and take them back to Mogadishu. It took us forever to get back. When we finally got them to port, we asked the Port Manager where he wanted these guys. He didn’t want them and told us to take the ship somewhere else. We didn’t want a diplomatic incident, so we called up the Commander of the Middle East and told him the story. We were told to just leave them anyway. We told Mogadishu ”the Adele II is your headache now.” The Adele II dropped anchor, and we headed back to the Persian Gulf. In our wrap-up report to the Commander Middle East, we included a “lesson learned” – translate “Heave Around” in every known language. I am accepting ads for this blog if you would like to make an announcement, highlight something your company is offering or want more visibility. I am running a special for new clients as well. I offer white-label services which give you the ability to use this content for your own daily emails. The blog has thousands of subscribers / followers and an open rate around 50%. Please feel free to reach out to brent@thedailytearsheet.com if you would like to discuss this further. [Continue Reading...]( [Morning Report: Inflationary expectations increase.]( And, in case you missed it: - [Data giants MongoDB and Snowflake just got upgraded]( - [The Stocks Take a Dip in Asia]( - [S&P 500 Predictions Today Amidst Economic Uncertainty]( - [Monocerus ICO (CERUS) Is Almost Here. Don’t Miss It]( - [Will Samsung Flip Phone Fans Get Very Cheap Foldable Phone?]( - FREE OR LOW COST INVESTING RESOURCES - [i]( [i]( [i]( [i]( Sponsored [Take Action Now to Safeguard Against the Dollar's Imminent Decline]( Skyrocketing national debt, persistent inflationary pressures, and a government struggling to implement effective measures all serve as clear signals of an impending collapse. The implications of such an event would be nothing short of catastrophic. [Go HERE to see the Potential Investing Opportunity]( By clicking this link you are subscribing to The Investment News Daily Newsletter and may receive up to 2 additional free bonus subscriptions. Unsubscribing is easy [Privacy Policy/Disclosures]( - CLICK THE IMAGE BELOW FOR MORE INFORMATION - [i]( Good Investing! T. D. Thompson Founder & CEO [ProfitableInvestingTips.com]() ProfitableInvestingTips.com is an informational website for men and women who want to discover investing and trading products and strategies to educate themselves about the risks and benefits of investing and investing-related products. DISCLAIMER: Use of this Publisher's email, website and content, is subject to the Privacy Policy and Terms of Use published on Publisher's Website. Content marked as "sponsored" may be third party advertisements and are not endorsed or warranted by our staff or company. The content in our emails is for informational or entertainment use, and is not a substitute for professional advice. Always check with a qualified professional regarding investing and trading guidance. Be sure to do your own careful research before taking action based on anything you find in this content. If you no longer wish to receive our emails, click the link below: [Unsubscribe]( Net Wealth Consultants 6614 La Mora Drive Houston, Texas 77083 United States (888) 983-9123