Morning Brief – US Consumer Spending

US Consumer Spending

Despite 525 basis points of cumulative rises in just over 18 months by the Federal Reserve, the US consumer has carried on spending. Doubtless this will be on the minds of those policy makers gathered at Jackson Hole, Wyoming this weekend as they debate just when to stop the rate rises before they send the US economy into recession. Maybe not a nationwide phenomenon but certainly an illustrative story is that of the new Caesars Casino in Danville Virginia which was set up just a few months ago and has already seen 400,000 visitors spending USD 50,000,000 which has far exceeded the expectations of its management and demonstrates that consumers do have disposable income. In case you are wondering that represents USD 125 for each and every visitor.
USD/CAD 1.3565.

Asian Seafood

This week China has banned the import of Japanese seafood due ostensibly to the Japanese decision to release radioactive water from the Fukushima nuclear plant into the sea. While China is Japan’s number 1 export market for seafood it nevertheless represents less than 1% of Japan’s global exports which is of course dominated by autos. So the conclusion is that this is more of a political gesture on the part of China.
USD/JPY 145.85.

Canadian Mortgages

The yield on 5 year Canadian Government Bonds stands at 4.17%- a 16 month high-which is up from 2.66% in March. Unlike in the USA where mortgages are commonly of 30 years maturity, in Canada most are less than 5 years.. that means that roughly 20% of all Canadian mortgages (Total market as at Jan 2023 CAD 2.08 trillion or USD 1.53 trillion) so CAD 400 billion will come up for renewal in the next year which given this steep rise will cause real hardship to Canadian homeowners since 5 year mortgages now stand at 6.79%. It may also throw up some value for buyers too.

Supersonic

1500 mph or 2 and a half times the speed of the fastest jet across the Atlantic? News of a new NASA jet that, if it is indeed introduced into commercial service, means that it will take just 90 minutes to fly from NYC to London. Hardly time for a gin and tonic and a meal, let alone a movie.
GBP/USD 1.2640.

Sherry

This day 61 years ago in 1962, Frankie Valli and the Four Seasons entered the charts with this hit which has proved to be an evergreen at parties and weddings ever since- especially with Dad dancers:

Sherry, Sherry baby
Sherry, Sherry baby

Sherry baby (Sherry baby)
Sherry, can you come out tonight (Come come, come out tonight)
Sherry baby (Sherry baby)
Sherry, can you come out tonight

to my twist party
(Come out) Where the bright moon shines
(Come out) We’ll dance the night away
I’m gonna make-a you mine

Sherry baby (Sherry baby)
Sherry, can you come out tonight
(Come come, come out tonight)
(Come come, come out tonight)
You, ooh better ask your mama (Sherry baby)
Tell her everything is all right

with your red dress on
(Come out) Mmm, you look so fine
(Come out) Move it nice and easy
Girl, you’ll make me lose my mind

Sherry baby (Sherry baby)
Sherry , can you come out tonight
(Come come, come out tonight)
(Come come, come out tonight)

Sherry, Sherry baby
(Come come, come out tonight)
(Come come, come out tonight)

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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