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Retail sales, jobless claims and the $3.5 trillion infrastructure bill

CEO Tony Nash joins CNA’s Asia First program to explain the logic behind the US market’s performance. Will the better-than-expected retail sales continue to the Christmas season? What is his outlook for Q3 and what’s hampering the economic recovery in the States? And what are at stake around the success of the $3.5T infrastructure bill?

 

This video segment was published on September 17, 2021 and is originally from Channel News Asia’s videos on demand, which can be found at https://www.channelnewsasia.com/watch/asia-first/fri-17-sep-2021-2186306

 

Show Notes

 

CNA: Well, Wall Street closed mixed in the State overnight as the major indices fail to build on Wednesday strong performance, while for the session, the blue chip Dow closed lower by two tenths of 1%, and the S&P 500 fell by a similar percentage.

 

However, the Nasdaq managed to eak out second consecutive day of gains. Well, this after investors digested mixed economic readings released before with the opening Bell when August retail sales surprised the market and rose 0.7% from the month prior, with analyst expecting a decline. But on the downside, jobless claims rose from last week’s pandemic low.

 

Of course, to help us understand the logic behind all the market movements were joined by Tony Nash, founder and CEO with Complete Intelligence, speaking to us from Houston, Texas. Very good evening to you, Tony.

 

So we’re looking at the better than expected retail sales number. And do you expect that momentum to continue given that we are 100 days away to Christmas in the State side and 99 days away from here in Singapore side.

 

TN: And we certainly hope that continues. But it’s really uncertain, given some of the corporate outlooks and given some of the other indicators that we’ve seen: purchasing managers indices and the regional Fed reports, Fed Manufacturing reports.

 

The port hold-ups in Long Beach are not helpful either. It’s really hurt supply chain. So we could see that spending tick up. But we do expect prices to continue to rise. And so there’s really a trade off there in terms of the volume that’s sold and the value that’s sold. And when we’re looking at, say a 1% rise in value of retail sales, that’s quite frankly, not even keeping up with inflation.

 

CNA: In the meantime, we’re also seeing that the weekly jobless claims increased. And of course, before that, many economist with organizations like JP Morgan has downgraded their third quarter economic growth outlook. So what is your outlook there and what is hampering economic recovery over there in the State Side?

 

TN: Well, it’s really companies are not seeing great investment opportunities. So the demand for credit in the US, just like in China, and just like in Europe, the demand for credit is really declining.

 

So we’re not seeing companies spend on big ticket items. They’re not investing on new equipment, they’re not investing on new projects. And so that’s hurting everything downstream because there are impacts across the economic spectrum when companies decide to spend on big ticket items. This is hurting the US. It’s hurting China. It’s hurting Europe.

 

So between now and you mentioned the end of the year, we expect that corporate spending to have an impact, the damper in corporate spending. We expect the supply chain difficulties and inflation have impacts as well. And if unemployment continues to tick up like it did, we could have a very difficult Christmas season. And the Fed and city administration here in the US are really contending with that, because as they go into the last quarter of the year, they’d really like to see things tick up.

 

CNA: And talking about those spending of course, there’s one catalyst that investors are watching out would be the passage of the $3.5 trillion infrastructure bill. But given the situation that a Biden is facing now, do you think that this increasing likelihood that this bill can’t be get past?

 

TN: Yeah, I think you’re right. With the failed withdrawal from Afghanistan, Biden has really lost a lot of the support from Democratic moderates. And so he’s got the support of the extreme left Democrats. But a lot of the Democrats in the middle are really starting to say, “Hold on a minute. We need to be really careful about how much we support Biden,” because those guys have to be reelected in November of ’22. So from here on out, the voters in their respective districts will be paying a lot of attention to what they’re doing.

 

This 3.5 trillion infrastructure plan, only 1.2 trillion of it, I say “only” but 1.2 trillion of it is dedicated towards real hard infrastructure. The rest of it is a lot of social spending, a lot of pet projects, and that’s a lot of money. 2 trillion plus dollars.

 

So Americans are really tired of seeing big stimulus programs put out, and they’re really tired of seeing the pork going to people connected to politicians. So they’d much rather see the lower $1.2 trillion program. It’ll go direct to infrastructure. They’ll see it. It’ll be a very tangible spend.

 

One other thing to keep in mind is there is still $300 billion that haven’t been spent from the stimulus program that came out in Q1 of 2021. So a lot of Americans are asking, why do we need to green light another three plus trillion dollars in spending if we still have $300 billion that’s unspent?

 

CNA: All right, Tony, thank you so much indeed, for your analysis. Tony Nash, founder and CEO with Complete Intelligence.

Categories
Podcasts

Biden “clear we will win” but key results still outstanding

Tony Nash joins Rahul Tandon at the BBC for Business Matters podcast where they examine how diversity of Hispanic groups in Florida, voted and how this influenced Trump’s winning of the state in this election.

 

This podcast was published on November 5, 2020 and the original source can be found at https://www.bbc.co.uk/programmes/w172x192dk8khr8

 

BBC Business Matters Description:

 

Democratic challenger Joe Biden says it is clear he is winning enough states to take the US presidency, despite key results still outstanding. We get the latest from the BBC’s Michelle Fleury in Pennsylvania, one of the decisive states still counting votes. We examine how diversity of Hispanic groups in Florida, voted and how this influenced Trump’s winning of the state in this election. Will President Trump soften his stance towards China if he is re-elected? And how might relations with Sino-US relations change with Biden in the White House? We ask Stephen Vaughn, General Counsel for the Office of the United States Trade Representative under Donald Trump until 2019.

 

All this and more discussed with our guests throughout the show. Nicole Childers, executive producer of Marketplace Morning Report in Los Angles, Tony Nash, founder of Complete Intelligence, in Austin Texas and Samson Ellis, Bloomberg’s Taipei bureau chief.

 

Show Notes

 

RT: And you confused, Tony, from above, from the messages coming from from the Trump family, from some within the Republican Party, Mitch McConnell Lasalle’s Mitch McConnell says, look, this is part of American life. You get lawyered up and that’s how it works.

 

TN: I’m confused about things like your reporter who said that Republicans are claiming they’re irregularities without evidence, but she herself said in her report that they’re showing her photos of irregularities.

 

RT: So I suppose she wouldn’t be able to check. She wouldn’t be able to check what those photos are. But on the general point here of where we are at the moment, because this seems to be an election that may well be decided not by the public, but by the courts.

 

TN: Oh, it definitely will be. We’re not even close to finishing this up. This thing won’t be done on Friday. It won’t be done next week. We’ll be in the courts for weeks, if not months, because if you look at things like Wisconsin’s voter turnout, it was 89 percent of the voting population.

 

Turned out that’s a five and a half standard deviation event, which is like one in 100 million. OK, there is no likelihood that 89 percent of registered voters in Wisconsin turned out because unlike places like Australia, it’s not mandatory to vote in the U.S. And so you normally have 60 to 70 percent of a voter base turnout in a place like Wisconsin with 89 percent of people turned out of five and a half standard deviation event.

 

It’s just not normal. And so there’s…

 

RT: But not normal doesn’t mean that it’s not possible, does it, Nicole? Or is Tony right here? We do need to look at some of these figures and understand why there’s a different.

 

TN: Well, I’m sorry, but it’s statistically impossible for that to happen. A five and a half standard deviation event is statistically impossible to happen on an election day.

 

RT: Nicole, I really should have concentrated more in school, but on statistics. But here we go.

 

TN: These are the reasons that they’re looking at legal action and these are the reasons they’re looking at recounts.

 

RT: If you could come back on this point, because then we’re going to move on to Florida.

 

TN: We can be sure that Pennsylvania is going to the Supreme Court. There was a court action that went to the Supreme Court before the election, before Amy Meconium was on the Supreme Court. So now there is a clear Republican majority on the Supreme Court. So at the time, the Supreme Court said we’re going to leave this alone until after the election, unless there are grounds for the court to review it. And so this is why there’s plenty of photographic evidence you can look at all over Twitter. You can look all over. I’ve spoken to a number of very senior Republican Party officials today. Pennsylvania is definitely going to the Supreme Court and there may be other states as well. So we’re not even close to deciding this thing. And if these cases are at the Supreme Court, these state level safe harbor laws mean nothing.

 

RT: Let’s see what happens…

 

TN: If there are federal violations when these just don’t mean anything.

 

RT: Let’s see if there’s a long way to go. Clearly, as you both said in this story, we’re going to be continuing to cover it here on the BBC World Service.

 

An interesting discussion there on the Hispanic vote in Florida, There in Texas, where, of course, there is also a large Hispanic community. But it’s too easy to generalize in this election, isn’t it, because the Hispanic community is so diverse, it’s not one vote at all.

 

TN: I live in Texas, we have about 40 percent Latino or Hispanic population and about 40 percent Caucasian or white population. So it’s pretty even and the rest of the population is very diverse. So now this is a pretty deep red state.

 

And there was a huge move about, I think, three or 400 million dollars that came into Texas from Democrats out of state to try to turn Texas blue, which means turn out to be Democrat. And it utterly failed. There was not a single seat that turned to Democrat in the state of Texas that wasn’t already a Democrat.

 

RT: But that gap of victories is narrowing, isn’t it, in Texas?

 

TN: I don’t think so. I don’t think that’s happening, I think that’s more wishful thinking than anything. And I think when you see the amount of the Latino population that is voting Republican, it’s growing, actually.

 

And if you look in Florida, in Miami, you actually see a very large amount disproportionately Hispanic community that actually voted Republican. So the Republican Party is appealing to African-Americans and Latinos and Asians. In a way, if you look at the Indian population, meaning the Indian population in America, they’re generally very heavy supporters of Republicans under Trump, not before.

 

RT: That’s a global trend. I want to move to Nicole very quickly, but that is a global trend because we see it here in this country as well with a move towards a conservative candidate that’s often to do with economic success. And Tony, I’m sad to see you go, but thank you very much for your contributions. It’s a difficult subject that you’ve managed to make some sense of, I think, for us. So thanks very much for Tony for giving us some of your time on what’s been a very busy day for.