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'm doing so call me at cbc or tweet me at jim kramer maybe everything's still too high and that's what fed chief jay pals fighting in his war against inflation every time i think prices for everything have started to go lower including stock prices like we saw last week when they plummeted we get a nice bounce dall gaining 641 points smp jumping 2.45 percent nasdaq pole vaulting 2.5 yep it strikes me that the fed still got a ton of work to do if we're going to get inflation under control and make no mistake that's the only way that this bear market truly comes to an end now according to the great market historian larry williams the average bear market lasts roughly 180 days we're at day 190 that's how long it's been since the federal clear board of inflation last november although it didn't really get serious until this year it makes you want to believe today's the major trend not a minor court but until the fed makes more progress i don't believe the decline is over and you need to lighten up on days like today as we did with my charitable trust as investing club members know all too well what needs to go down more let's start with oil our government's approach to pushing down the price of crude is totally unserious president biden rather go hat in hand to saudi arabia than make nice with domestic producers here in america the white house has a schizophrenic attitude toward oil they don't want new pipelines on environmental grounds but they also want to get energy inflation under control because high gasoline prices are lethal to getting re-elected even without doing anything else biden could at least suspend the jones act so that foreign ships can bring oil from louisiana and texas to new england where it's really needed right now those tigers need to be american and most of the fleet is foreign instead we hear about a tax holiday for gasoline 18 cents kind of like the strategic petroleum reserve tiny temporary attempts to deal with a much bigger problem sometimes i wish they would just call me in so i could tell them the oil industry is not the enemy they want a lot of what biden wants but they don't know how to ask and he doesn't know how to tell i'm inviting david faber on tonight to talk about his documentary on exxonmobil and see if there's any way to get the most visible sign of inflation down can baiden ever sit down with americans who happen to be involved with fossil fuels or can he only sit down with saudis another reason why inflation is so ingrained take the breathtaking news from home building giant lenoir this morning it had amazing earnings but then proceeded to tell you how the future won't be as great as the past so far so good for jay lenore highlights one of the strongest housing markets in the country for the last few years in seattle listen to this while market fundamentals with limited land supply and low inventory remain extremely strong buyers have pushed back for a reset in pricing so far so good for jet right meaning despite land shortages buyers are saying no they go on the higher priced and highly sought locations around seattle have seen a significant pullback in sales in may and early june wow that's that's terrific from an inflation perspective they continue this pullback as a result of both continued price appreciation the first quarter causing concern over home values being overpriced and stock market corrections which had a direct impact on employee stock compensation plans and not to mention higher interest rates yep in short higher interest rates lower stock market they are doing their job causing consumers to pull in their horns it's all good for the fed so far except one problem after all that negativity and caution we learn this quote once again in this market we are at prices that are still significantly higher than the year go period higher so after that higher rates declining stock prices lower price adjustments we still haven't popped the bubble scarce rentals and greater household information inexorably drive home prices higher so in other words all this stuff that i read that made me feel like you know what we are going to be seeing a top in interest rates sometime soon wrong just wrong there is good news in this report though there are a lot of rich towns where lennar's building when i was out west in silicon valley i heard many execs how they intended to pull up stakes from their home turf and moved to some of these towns the ones that were mentioned atlanta charleston nashville reno cities like in colorado this pattern is consistent with what lennar is saying why are these tech companies moving well there's simply aren't enough engineers in silicon valley so wage inflation is nuts and because there are so many potential employers these engineers have all the leverage so the companies would rather move to new cities where there are fewer potential employers and people can't job hop as easily job hop remember that term that's wage inflation oddly these new wealthy cities are a godsend for jay pal because he needs to break still one more cycle wage inflation and the tech industry is finally doing something about it it's walking i predict the first mass layoffs will be in of all places silicon valley as the larger companies migrate to cheaper locations and the smaller companies struggle to raise money beyond housing j-pal needs stocks lower in order to beat inflation but the things aren't totally static i mean take kellogg today right telecom like many companies you're going to see kellogg got fed up with their slow stock price didn't seem like they could do anything so they decided to break up into three companies a global snacking international breakfast play a north american and caribbean cereal play and a plant-based foods play now i'm all in for this is there's strong demand for each of these products we know remote work generates a ton of snack demand including a love for pringles and cheeses which i actually insist is real food not just colored facsimiles my kids vehemently disagree with that the market liked the kellogg breakup the stock valued almost two percent but the more i dug into it the more i realized that people like it mainly because the company's been able to put through big price increases once again the food shortage has forced processed food companies to pass on their cost increases to the consumer and that is very bad news for the fed's war on inflation like homes you need food prices to be rolled back kellogg's acting like that's not going to happen hey they know they're the food company by the way i do like to kill a breakup is the remaining company will keep a solid dividend when you put them all together and i think the plant-based spin-off could end up getting acquired by any packaged food player that wants to diversify away from the process stuff but mostly i like it because it can put through all the price increases at once because kellogg's got such a good brand name from the fed's perspective i argue that the stock market is the most intractable beast of all i don't like it but if powell wants to beat inflation he needs stocks to keep going lower not higher like today because the wealth effect is so potent in recent years poundful gains in the stock market have allowed the winners to spend like crazy if powell can get this market to go down and stay down repealing much of those gains then the rich are less likely to spend aggressively and a lot of people are more likely to remain in the workforce when they might otherwise have retired but this market it just refuses to roll down and play dead a total affront to what jpal wants you know me i'm always in favor of higher stock prices because you have a portfolio and i want you to make money however i've lived through enough tightening cycles and i know that this has to happen before powell can declare victory that's why right now the best outcome will be for the averages to come down quickly so we can just get it over with powell's probably hoping today's action is just another temporary bull spike in a broader bear market the bottom line pal had better hope this run won't last or else those beach house prices new construction jobs lennar homes processed food stocks and oil prices won't be going down and staying down anytime soon let's go to stacy in north carolina stacy hey y'all jim from north cap atlanta how are you good long time lesson first time caller that's what i'm asking about today's been waving between 170 and 175 for a few weeks it's 52 week highs of 233 and has a yield of near 3.5 the ticker is ups it is a good time to buy or let it run the stock has come down a great deal it got that contract the extension that i was so worried about so the answer is stacey yes three point four eight yield carol thomas contract 13 times earnings call me a buyer all right pal better hope this run won't last or else those beach houses prices new construction jobs lennar homes and yes processed food stocks and oil won't be going down and staying down anytime soon he needs that let's get it over with i'm mad tonight you called in and asked me about goodyear and i invited the ceo to join us in the show to break down the latest because the stock has plummeted so i'm sitting down with the company's top brass to make sense of the recent action in the stock then two analysts two price target cuts i'm taking a bite of sweet green to make sense of how wall street is doing unprofitable growth storage in this environment that you happen to like to go to plus the oil patch has become one of the hottest sectors in the economy so that lets me sit down with my squawk on the street colleague david faber to discuss what he's learned in his upcoming documentary on exxon
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