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This week we surpassed Biden’s first 100 days in office and his first Joint Address to Congress, so we have plenty to cover.
After 100 days, his grades are in, and they are okay. He is doing better at a 52% approval rating than Trump, who was at 42% during the same time. But Biden's rating is markedly lower than some of his predecessors. President Obama was at 69%, and President Reagan was at 73%.
Also, Biden gave his first address to Congress this week, where he pitched his “infrastructure1” bill as a way to help America better compete with China. He also said he wants to increase taxes on the wealthy and use the federal government to rein in the wealth gap. Lastly, he asked for Republican input/support on some of these measures because as the Senate currently stands, he does not have the votes to pass most of this legislation.
Tim Scott, Senator of South Carolina, criticized President Biden for failing to fulfill his campaign promise of unity and instead embracing divisive rhetoric on race and a radical agenda of government expansion. In his speech, Sen. Scott went as far as to say, “Hear me clearly, America is not a racist country.” (Scott is one of 3 black Senators). Immediately after the rebuttal #UncleTim trended on Twitter, a play on the racist slur Uncle Tom.
In my opinion, and the polls are also reflecting it, he overshot his mandate. In his first 100 days, he has acted more like an FDR or LBJ transformational president than the “return to normalcy” president that he pitched to voters in November. Most of his agenda does not stand a chance at getting passed because of the even divide in the Senate, but at minimum, he is playing lip service to the progressive wing of the Democratic party. Time will tell if this front-loaded progressive agenda will come back to haunt him in the 2022 mid-term elections.
This week had earnings calls for some of the biggest names in the market and a lot of commentators sounding off on what Biden’s proposed capital gains tax hike means for investors.
Big Tech Earnings: Microsoft, Apple, Google and Amazon all had strong revenue and earnings (profit) growth. Some analysts think this is the top for all of these companies as the US economy opens up and people start spending more on entertainment and less on online shopping and new phones.
Ford had great earnings and revenue growth in Q1, but had to guide dramatically down because of the chip shortage. Next week, GM announces their earnings, and investors are going to be watching to see if GM will also have to guide down because of the global chip shortage.
Rising raw material and labor costs were also something that kept popping up in earning calls. Lumber has been one that keeps popping up in the headlines, and this is due to the fact that the Canadian dollar (aka the loonie) is trading at a 3-year high to the US dollar. Labor costs are also experiencing upward pressure because of the continued government stimulus that is making prospective workers reconsider re-entering the work force.
I think the “great re-opening” could be a short-lived phenomena. There is a belief that once the economy opens up Americans are going to spend all the money that they have been forced to sit on during COVID-19, and the economy will flourish.
Why I think this will be short lived:
There will be so much demand in leisure activities but little supply, and it will cause prices to rise. The money you saved will not go as far as it did in 2019.
The obsession for more stimulus from the Biden White House could pour gasoline on an already hot economy and potentially force the Federal Reserve to raise interest rates.
Higher interest rates incentivize people to save rather than spend. When people spend less they then have more money in the bank, placing less money in the hands of job creators, a.k.a. businesses.
What does this mean for you?
If you were someone who left their money on the sidelines (not in the stock market) your savings that you originally thought were going to fund a house down payment or multiple vacations might get you half the home you thought and half the vacation you planned for.
Recycling is no longer just for plastic bottles.
NASA launched four astronauts into space using a recycled Space-X rocket. This was the first time a recycled rocket was used for human travel. All previously re-used rockets were cargo only.
One of the biggest expenses of space travel has been rocket costs. Before Space-X, all rockets were single-use. With the advent of reusable rockets, commercial space travel is getting closer and closer.
The space race in the 20th century was between the US and Russia, now in the 21st century is between Elon Musk’s Space-X and Jeff Bezos’ Blue Origin.