CPI, PPI, Survey says...,4T, Stablecoin, Kellogg & Ferrero, a Birkin Bag, and who was Sockum Jochum?
This Past Week – Economically – PPI, CPI, and Surveys
The CPI – Consumer Price Index - seemed to lead the headlines this week. It was up 0.3% monthly and 2.7% annually.
Oddly enough, that is precisely what economists were expecting, and yes, it was up from last month’s measure of 0.1% and 2.4% respectively.
So, what was up and what was down? Well, it depends on whether you are looking at the month or the year.
Fuel was the most significant driver, with fuel oil up 1.3% for the month, but for the year, energy was down 0.8%. Piped gas services were up 14.2% for the year but only up 0.5% for the month.
And that’s why they separate fuel and food from everything else.
Food away from home – yep, that’s the category – was up 3.8% for the year. Food at home – groceries – was up 2.4%. It’s cheaper to eat at home, folks.
How about core CPI, the stuff without fuel and food?
Shelter was up 3.8% year over year while medical care services were up 0.6% for the month. In other words, your rent or house payment increased while you were at the doctor's office, being charged more.
Used cars & trucks were down 0.7% for the month but up 2.8% for the year. Personally, I think the price of used cars isn’t coming down anytime soon.
The PPI – Producer Price Index – was unchanged.
That was easy. Prices charged for final demand products (that’s an economic phrase if I ever heard one) did not go up or down.
Final Demand Products are things that are completed and are now ready for sale to the wholesaler. This month, prices from the manufacturer to the retailer remained unchanged. That’s really positive.
Survey says… The Empire State Manufacturing Survey and the Philadelphia Fed Manufacturing Survey were released. That is a survey of the remaining businesses in New York State, as well as the businesses in Philly.
Expectations from analysts were for continued negative trends. However, trends for both regions were up.
More manufacturers were expected to hire more people than last month.
Also, new orders and shipments both increased.
All good news.
What is worth $4,000,000,000,000?
Nvidia.
How do you secure the bag for a nice summer vacation in 2025?
Buy 1000 shares of Nvidia stock at $10.20/share on July 17, 2020. $10,200.
Its stock price is now $172.41. $172,410.
And since it’s over a year, it’s long-term capital gains tax!
This is NOT an endorsement to purchase Nvidia stock; my dip into tech stocks was right before the tech bubble burst, so I stay in the shallow end.
BTW, that was 25 years ago.
Just stick with what you know.
Oh, and the whole point of this segment was to make sure you know the answer to a business trivia question: What company was the first to hit a market capitalization of $4 trillion?
Stablecoin
It is my somewhat jaded experience that whenever someone names something, it is sometimes the opposite of the name.
That said, will Stablecoin be stable, and will it be worth some coin?
A stablecoin is a cryptocurrency that is pegged to the U.S. dollar, and Congress, just days ago, passed legislation that would regulate stablecoins and clear the way for broader use of the technology in everyday finance. No, it’s not in place yet.
Yep, the banks are not thrilled, because once stablecoin accounts are established, there is nothing that won’t stop the Zoomers (Gen Z’ers) from direct depositing their paychecks into stablecoin accounts and zipping their money around the world.
And that means bank accounts are not the sole property of banks anymore.
Headlines
Italy’s Ferrero Buying Kellogg
And you thought your Cocoa Crispies had too much sugar in them already? Just wait until they throw in a tub of Nutella.
U.S. cereal sales declined 6% in the last three years, but Ferrero wants the relationships that Kellogg has with grocers.
Not surprisingly, Kellogg stock was up 31%.
Ferrero is family-owned and is known for its Ferrero Rocher confectionery. In 2018, it acquired Nestle’s U.S. candy business, which includes Butterfinger, Nerds, and SweeTarts. They also own Keebler, Famous Amos, and Mother’s Cookies.
When asked about Ferrero, spokesman Anthony T. Tiger said, “They’re great!”
Hermes’ Original Birkin Sells for $10M – yes, that’s the headline, but it was a small article.
Just so you know (because I really wasn’t sure), a Birkin is a VERY expensive purse, sorry, handbag.
And when they say ‘original’ they mean it. This particular handbag was made 40 years ago for the late singer and actress Jane Birkin.
It was bought by a Japanese buyer in a Sotheby’s auction in Paris.
The Japanese economy must be looking up.
Sears Shutting Down Another SoCal Store
Honestly, I didn’t know they had any left.
The Whittier, California store is closing as soon as everything is sold. And the Puerto Rico store too.
In the U.S., that leaves two stores in California and two in Florida.
If you're ever with a Boomer and don’t know what to talk about, and you have to talk to them, ask them if they have ever heard of something called a Sears catalog.
They’ll go on and on about how that was the coolest thing in the world and how that was before the internet and how the toy section was pages…. Sorry.
Who was ‘Sockum’ Jochum?
Jochum was a teacher who ended up settling down in South Bend, Indiana, graduating from Illinois State University in 1957, paid for with money earned from a career in baseball, but I’ll get to that in a minute.
Jochum ultimately earned a Masters in Physical Education in 1961 and retired in 1983 after teaching PE and social studies for 27 years.
But teaching was only half the story.
Born in Cincinnati to Hungarian parents in 1921, Jochum grew up playing many sports. After high school, Jochum played semipro ball on local teams.
In April 1943, Jochum attended a tryout in Cincinnati organized by a scout from the Cincinnati Cubs, who was recruiting ball players around the Midwest for his boss’s new venture.
Jochum was one of six players to make the final cut at Wrigley field. And when I say Wrigley Field, the boss was Philip K. Wrigley and it was his field.
When tryouts were over, Jochum was awarded a contract to join the South Bend Blue Sox for $50/week.
Jochum was 22 years old.
Jochum earned the nickname ‘Sockum’ by leading all players in hits during the league’s inaugural season. Career-wise, Sockum struck out only 125 times in 2,840 career plate appearances.
Take my word for it – that is incredible.
Sockum also took the mound and had a career 1.51 earned run average, which is also really good. And stole 7 bases in one game.
It wasn’t easy. The team played every day, with doubleheaders on Sundays and holidays.
The home field was NOT Wrigley Field, but the center of a race car track in South Bend.
Nevertheless, they had a solid following.
As Jochum tells it, one of the worst parts was wearing skirts that did not protect their bare legs.
“Lots of ouchies when you slid.”
Betsy ‘Sockum’ Jochum was an All-Star outfielder and pitcher for the South Bend Blue Sox of the All-American Girls Professional Baseball League, aka AAGPBL.
That is the league chronicled in the movie “A League of Their Own”.
Ms. Jochum was the last surviving original player of the league. She passed away May 31 at home in South Bend, Indiana, at the age of 104.
I ran a little long on this issue but that’s because it’s that time of the summer, and the editors of the Report will be taking some time off and unable to collaborate with each other. Consequently, the next report will be on August 11. Let’s see how much has changed by then. My guess? Not a lot, but there will always be excellent talking points to bring to your attention.
Phrase of the week…
"The best way to predict the future is to create it."
Peter Drucker, management consultant and author.
You are in charge of you; now go create it!! Yes, it absolutely will require that you GOYA, but success has to be earned! Make it so, and have a great week!
