Boy is Katy Perry good! Â
Unlike the Oscars or the Rock and Roll Hall of Fame (or Baseball, for that matter), the MTV Music Awards don’t wait until you are pretty much dead to give you a lifetime achievement award – they give it to artists who are still in their prime and the artists have to get on stage and strut their stuff – to demonstrate why they are getting the award.
Katy Perry did not disappoint last night, with a fantastic set and you can see by the look on the kid’s faces how meaningful her music is to them. I know that first hand because my kids dragged me to see her in NY and I was a super-dad and got them floor seats but screw that for me and I took a seat by myself on the sides – where I could keep an eye on them from above. Â
Still, I really liked the concert and that was the first time I’d ever been in MSG with so many kids having a great time without drugs – it was very impressive! I used to think, when I was young, that I was seeing shows at MSG without getting high (OK, only the first few…) but I realized, as I got older, that the inverted dome of the Garden traps you and everyone else’s smoke in a very small space so EVERYONE was high – don’t let people tell you otherwise…
I was at this one, 15 years old at the time – you can’t deny your children these memories! We were lucky, this was a quick bus ride from the suburbs for us so we saw EVERYTHING (tickets were only $12, too!) so, when my kids REALLY want to see a show – I make it happen for them because I’ve done A LOT of things in my life – but those concerts really stick in my memories – end of PSA. Â
Meanwhile, Taylor Swift tickets in Miami are $2,000 a seat – that’s F’ing insane! Of course that’s because everything is scalped these days – there’s not even a point to TRYING to buy a ticket from the actual venue – they are all gone in 30 seconds – thanks AI! So no, my kids will not be going to that one…Â
Anyway, the markets are still hung over from yesterday’s CPI Data and the subsequent wild ride we took and now we are looking forward to today’s Producer Price Index (PPI), which is what I’ve been waiting for while vamping about concerts. 😉 Despite a disappointing CPI Core reading, the indexes ripped back yesterday and the futures this morning are showing a carrying through – so far…
8:30 Update: 🤖 The August 2024 Producer Price Index (PPI) report shows a modest 0.2% increase in final demand prices, primarily driven by a 0.4% rise in services. Core PPI, which excludes volatile food and energy components, also rose 0.3%. These figures, while slightly above expectations, indicate that inflationary pressures at the producer level are easing, but not as quickly as hoped.
The PPI, like the CPI yesterday, indicates that inflation, while moderating, is still very much present in the Economy. I’d say for sure anything bigger than a 0.25 cut is off the table and still I don’t see why the Fed would be cutting next week at all. The 0.3% increase in Core PPI aligns with the sticky Core CPI figure released yesterday. This emphasizes the Fed’s concern about persistent inflation in certain sectors, PARTICULARLY Services – which are experiencing the same Wage Inflation as the broader job market.Â
Interestingly, the Futures are chugging along, shrugging off this disappointing report and that puts our bonce chart in pretty good shape – this rally is still on, folks! Â
Once again it’s the small caps that are dragging us down and the NFIB Small Business Optimism Index, which tracks sentiment among small business owners, posted disappointing results in the latest report with the index falling to 91.2 from last month’s 93.7 – erasing all the summer gains and hitting its lowest level since 2010!
This reading reflects a growing sense of pessimism among small business owners, particularly in light of the shifting political landscape. Historically, the index has shown a bias toward optimism during Republican administrations and a decline when Democrats are in power or expected to win. The current drop could be reflecting concerns about the tightening 2024 presidential race despite the fact that Trump is PROMISING massive tariffs while Harris is promising to aid small businesses. Â
The biggest concern from the report is the steep decline in Small Business Earnings. The “Actual Earnings Changes” category fell by 7 points, marking the largest one-month drop since October, 2022. Earnings now sit below even the low levels seen during the early days of the pandemic in 2020. This is a significant red flag for the broader economy, as small businesses are often seen as a key engine of growth and employment.
Another point of concern is the ongoing difficulty small businesses face in filling job openings. The “Job Openings Hard to Fill” category remains high, indicating that businesses are struggling to find workers, which aligns with broader concerns about labor shortages across various sectors and is YET ANOTHER REASON for the Fed not to be cutting rates…
The steep decline in small business optimism, especially in earnings and employment categories, signals deeper economic challenges ahead. Increased costs and a tight labor market are putting significant pressure on small business profitability, which could lead to further weakening in the broader economy. While inflation seems to be decelerating, it hasn’t provided enough relief to boost earnings, with inflation-related concerns still topping the list of problems for small business owners.
These weak Small Business Earnings are a warning sign. Small businesses account for a large portion of U.S. Employment, so persistent pessimism and declining earnings could foreshadow broader economic struggles, including reduced Consumer Spending and tighter Labor Markets.
Let’s be careful out there!Â
