George Chamberlin's Money in the Morning

May 22, 2015

Another record for the S&P 500 yesterday. The broad-based index finished at an all-time high for the 10th time this year as investors realized it will still be some time before the Fed gets around to raising short-term interest rates. To be sure, trading every day this week has been extremely light ahead of the Memorial Day weekend. Expect more of the same today.

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Another record for the S&P 500 yesterday. The broad-based index finished at an all-time high for the 10th time this year as investors realized it will still be some time before the Fed gets around to raising short-term interest rates.

The only major economic report today is the consumer price index for April. As expected, the cost of living rose just slightly, up 0.1 percent as energy prices continue to hold steady. Remember, "energy" means more than just gasoline prices. Over the past 12 months, the cost of living has actually declined 0.2 percent. However, the media is focusing on what is called the "core" rate of inflation, the package of items minus food and energy. It rose 1.3 percent year over year. This anemic pressure on inflation gives the Fed some breathing room on raising short-term rates. The minutes of the most recent Fed meeting show the majority of members see no reason to start hiking in June. For months, the "experts" have been swearing that the Fed must raise rates immediately. Of course, they have been completely wrong. Trust me, no rate increase in 2015.

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Speaking of the Fed, Chair Janet Yellen is delivering a key speech today at the University of Rhode Island. The topic will be an "economic forecast," so there could be a nugget or two of interest if she touches on employment, inflation and the timing of rate increases. Of course, by the time she delivers the speech, most of the traders and analysts back in NYC will already be out the door to get to their beach houses for the long weekend.

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Most of us have not had the pleasure of dining at a Shake Shack restaurant since they are mostly in the New York/New England area. But, thanks to a successful IPO earlier this year, the company has received a lot of attention. Yesterday it was reported that the company had filed for a trademark for "Chicken Shack," raising anticipation that it could be opening a whole new line of food shops. Shake Shack currently has just one chicken sandwich on the menu. The shares, which hit the street at $21 in the January offering, were up $7 to $90. By the way, Shake Shack will open its first West Coast restaurant in Los Angeles early next year. Probably worth a road trip.

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Speaking of IPOs, the offering by Shopify was a big success yesterday, going from $17 to $27. The word this morning is that an IPO for Uber could be in the works.

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I wonder why the avian flu outbreak isn't getting more attention. The worst outbreak in bird flu in U.S. history has sent egg and poultry prices soaring. As a result, nearly 39 million birds have died or been destroyed -- more than double the similar outbreak in the 1980s. About 10 percent of the egg-laying hens have been destroyed by the disease. As a result, the price of eggs sold in grocery stores has gone up 85 percent to $2.20 a dozen in the Midwest. The U.S. government has allocated $400 million to help poultry farmers deal with the crisis. This is usually the kind of story the national media jumps all over. Wonder why they are skipping this one?

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The Padres got blanked yesterday by the Cubbies, 3-0, and are 1-6 in their last seven games. They won't have to travel very far for their next road trip; they’re going up to L.A. to play the Dodgers over the weekend and then have a three-game series in Anaheim with the Angels. Time to get the ship righted, guys.

More George Chamberlin Columns

George Chamberlin's Money in the Morning

Another record for the S&P 500 yesterday. The broad-based index finished at an all-time high for the 10th time this year as investors realized it will still be some time before the Fed gets around to raising short-term interest rates.

George Chamberlin's Money in the Morning

It looks like a lot of folks on Wall Street are getting an early start for the Memorial Day weekend. Trading has been very quiet and prices are holding in a tight range with little news to move the markets.

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Video Interviews

BIA's Borre Winckel on building regulations, drought

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