“You don’t need to trade often. If you can catch one or two moves to the targets during the day with good size, you can make a good living and keep trading costs down” — unknown

1. Covid-19 Booster Campaign Is Expected to Launch Next Month — the Biden administration has completed plans for a fall Covid-19 booster campaign that would launch in September with 175 million updated vaccine doses provided to states, pharmacies and other vaccination sites.
The administration is procuring the doses, which drugmakers are updating to target the newest versions of the virus. The administration has also informed states, pharmacies and other entities they can begin preordering now through the end of August, according to the administration’s fall vaccination planning guide.
2. Biden’s Student Loan Forgiveness Plan to Cancel Up to $20,000 in Debt for Millions — President Biden will forgive up to $20,000 in federal student loan debt for tens of millions of Americans, a move that will provide unprecedented relief for borrowers but is certain to draw legal challenges and political pushback. Following more than a year of internal debate, the president said Wednesday that he will cancel $10,000 in federal student loan debt for borrowers making under $125,000 a year or couples making less than $250,000 a year. In addition, those who receive federal Pell Grants and make less than $125,000 a year would be eligible for total forgiveness of $20,000.
3. Mortgage Rates Rise to Two-Month High at 5.55% — the average rate on a 30-year fixed mortgage climbed to 5.55% this week, according to a Freddie Mac survey of lenders released Thursday. That is nearly double the rate on offer a year ago, though it is down slightly from June levels, which were the highest since 2008.
The higher mortgage rate is causing some prospective buyers to shelve purchase plans, real-estate agents say, because it adds hundreds of dollars or more to the monthly cost of owning a home. Sales of existing U.S. homes fell for a sixth straight month in July, the longest stretch of declines in over eight years. Elevated mortgage rates are also posing a financial threat to mortgage companies that revolve around refinancing homeowners into lower-rate loans. Some lenders are losing money, laying off employees or closing shop.
4. Fed Chair Powell Warns Rates Are Going to Stay High for Some Time — Federal Reserve Chair Jerome Powell signaled the US central bank is likely to keep raising interest rates and leave them elevated for a while to stamp out inflation, and he pushed back against any idea that the Fed would soon reverse course.
“Restoring price stability will likely require maintaining a restrictive policy stance for some time,” Powell said Friday in remarks at the Kansas City Fed’s annual policy forum in Jackson Hole, Wyoming. “The historical record cautions strongly against prematurely loosening policy.” He said restoring inflation to the 2% target is the central bank’s “overarching focus right now” even though consumers and businesses will feel economic pain. He reiterated that another “unusually large” increase in the benchmark lending rate could be appropriate when officials gather next month, though he stopped short of committing to one.

The week ahead — Economic data from Econoday.com:

“It is not the strongest or the most intelligent who will survive but those who can best manage change.” – Charles Darwin

1. Biden Signs Bill Aimed at Lowering Drug Costs, Boosting Renewable Energy — President Biden signed into law sweeping legislation to lower prescription drug prices, boost the renewable energy sector and impose new taxes on large corporations. The package includes hundreds of billions of dollars in subsidies for investing in renewable-energy projects and producing energy from renewable sources—and includes credits to help factories retool to turn out electric vehicles or other products needed in a low-carbon economy. It also includes tax credits to help homeowners upgrade their homes with more energy-efficient products. It gives a $7,500 tax credit for purchasing electric vehicles, although with conditions that could make it hard to qualify. The law creates a new 15% corporate minimum tax and a 1% excise tax on companies’ stock buybacks and sets aside roughly $300 billion for reducing the deficit. And it spends $80 billion over a decade on new workers and technology at the Internal Revenue Service.
2. Fed Minutes Show Fed Sees Interest Rate Hikes Continuing Until Inflation Eases Substantially — Federal Reserve officials at their July meeting indicated they likely would not consider pulling back on interest rate hikes until inflation came down substantially, according to minutes from the session released last week. They did not provide specific guidance for future increases and said they would be watching data closely before making that decision. Market pricing is for a half-point rate hike at the September meeting, though that remains a close call.
Meeting participants noted that the 2.25%-2.50% range for the federal funds rate was around the “neutral” level that is neither supportive nor restrictive on activity. Some officials said a restrictive stance likely will be appropriate, indicating more rate hikes to come.
3. U.S. Home Sales Dropped in July for Sixth Straight Month — U.S. existing home sales fell in July for the sixth straight month, the longest streak of declines in more than eight years, as higher mortgage rates and a shortage of homes for sale are cooling this once red-hot market.
Sales of previously owned homes dipped 5.9% in July from the previous month to a seasonally adjusted annual rate of 4.81 million, the National Association of Realtors said Thursday. That was the weakest pace of sales since November 2015, excluding the three-month pandemic-related drop in the spring of 2020. July sales tumbled 20.2% from a year ago. sales are slowing and the relentless rise in home prices is showing some signs of easing after repeated new highs. The median sales price of an existing home fell to $403,800 from a record $413,800 in June, the first decline since January, according to NAR.
4. U.S. Plans to Shift Bill for Covid Shots and Treatments to Insurers, Patients — The Biden administration is planning for an end to its practice of paying for Covid-19 shots and treatments, shifting more control of pricing and coverage to the healthcare industry in ways that could generate sales for companies—and costs for consumers—for years to come.
The Department of Health and Human Services intends to hold a planning session on Aug. 30 that would bring together representatives from drugmakers, pharmacies and state health departments with a stake in a Covid-19 treatment industry. Shifting payments for Covid-19 drugs and vaccines to the commercial market is expected to take months, an HHS spokesman said. At the meeting this month, officials and company representatives are expected to discuss reimbursement and coverage, regulatory issues and access to vaccines and treatment for the uninsured.

The week ahead — Economic data from Econoday.com:

“The biggest risk is not taking a risk. In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.” – Mark Zuckerberg

1. U.S. Productivity Falls for Second Straight Quarter — U.S. nonfarm labor productivity—a measure of goods and services produced in the U.S. per hour worked—fell at a seasonally adjusted annual rate of 4.6% in the second quarter from the prior quarter, the Labor Department reported. Economists surveyed by The Wall Street Journal had estimated a drop of 5%. Quarterly productivity figures are volatile, but the weak second-quarter number follows a 7.4% pullback in the first quarter, the sharpest drop in 74 years. Together with rising labor costs, the report points to the challenges for the Federal Reserve’s efforts to tamp down inflation that is running at a four-decade high.
2. House Passes Democrats’ Climate, Healthcare and Tax Package — the House passed a climate and healthcare bill Friday that will soon head to President Biden’s desk, the culmination of a yearlong push Democrats hope will motivate their voters in the midterm elections but that Republicans cast as harmful government overreach.
The party-line 220-207 vote comes less than a week after the Senate passed the measure. It imposes new taxes on large, profitable corporations, spends $87 billion over a decade on new workers and technology at the Internal Revenue Service, caps insulin costs for Medicare recipients, puts Medicare on course to negotiate drug prices and funds hundreds of billions in tax subsidies intended to combat climate change.
3. Pace of U.S. Inflation Eased in July as Energy Costs Dropped — the Labor Department reported the consumer-price index, a measure of what consumers pay for goods and services, rose 8.5% in July from the same month a year ago, down from 9.1% in June. June marked the fastest pace of inflation since November 1981. On a monthly basis, the CPI was flat in July after rising for 25 consecutive months, the result of falling energy prices such as gasoline. Core CPI, which excludes often volatile energy and food prices, eased to 0.3% last month, down sharply from June’s 0.7% gain. Price pressures abated across energy categories, with gasoline down 7.7% in July from the prior month. Used-car prices, up sharply earlier in the pandemic, also dropped on a month-to-month basis, as did airline fares and apparel.
4. U.S. Jobless Claims Rise Slightly to New 2022 High — initial jobless claims, a proxy for layoffs, increased to a seasonally adjusted 262,000 last week from a revised 248,000 the previous week, the Labor Department reported. The weekly number has been on an upward trend since reaching a 50-year low in March. ontinuing claims, a proxy for the number of people receiving government unemployment payments, increased by 8,000 to 1.43 million in the week ended July 30. Continuing claims are reported with a one-week lag.
The new figures come as other signs indicate that the U.S. labor market remains strong even though the U.S. economy shrank in the first two quarters of this year, according to the Commerce Department, as rising interest rates and inflation took steam out of business and consumer spending.

The week ahead — Economic data from Econoday.com:

THERE WILL NOT BE ANY POSTING FOR THE WEEK OF JULY 29TH 2022 — WE ARE AWAY FOR SOME NEEDED R&R

The week ahead — Economic data from Econoday.com:

The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance. — Ed Seykota

1. Senate Advances $280 Billion Bill Subsidizing Chip Manufacturing, Technology — the Senate voted 64 to 32 last week to advance a $280 billion package of subsidies and research funding to boost U.S. competitiveness in semiconductors and advanced technology. The package is set to give a big boost to domestic chip production, seen by the White House and leaders in both parties as critical to the U.S. supply chain and national security, as most semiconductors are imported from overseas. Shortages have also helped drive prices sharply higher for cars and other goods in recent years, and proponents say the bill will help cool consumer costs. The bill combines about $52 billion in subsidy funding to boost semiconductor production in the U.S., along with about $24 billion in advanced manufacturing tax credits that would also support the industry.
The package would authorize about $200 billion in spending, mainly for federally backed scientific research over the next decade. It would fund about $1.5 billion for next-generation wireless research and establish new long-term policies for the nation’s space program.
2. Fed Raises Interest Rates by 0.75 Percentage Point — officials agreed to a 0.75-percentage-point rate rise, which will lift their benchmark federal-funds rate to a range between 2.25% and 2.5%. The rate increase won unanimous backing from the 12-member rate-setting committee. The statement repeated language from previous meetings that said officials anticipate additional rate increases will be appropriate. “The labor market is extremely tight and inflation is much too high,” Fed Chairman Jerome Powell said at a news conference late last week.
3. U.S. GDP Fell at 0.9% Annual Rate in Second Quarter — Gross domestic product, a broad measure of the goods and services produced across the economy, fell at an inflation and seasonally adjusted annual rate of 0.9% in the second quarter, the Commerce Department said Thursday. That marked a deterioration from the 1.6% rate of contraction recorded in the first three months of 2022. The GDP report offered some discouraging signs, and underscored the challenges facing U.S. businesses, consumers and policy makers—including high inflation, weakening consumer sentiment and supply-chain volatility.
Consumer spending accounts for roughly two-thirds of total economic output, and Thursday’s report showed Americans spent at a cooler clip in the second quarter. Business investment worsened slightly. The housing sector slowed as borrowing costs rose.

The week ahead — Economic data from Econoday.com: