MidSouth Week in Review
May 7, 2021

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Both the S&P and Dow made record highs this week with the S&P rising 1.3%.  Commodity prices surged with both copper and lumber hitting record highs.  Stockholdings among the nation’s households increased to a record high of 41% of their total financial assets in April.  New home sales rose 20.7% in March with sales in the South up 40%, Midwest +30.7%, Northeast +20% and a 30% decline in the West.  Household income rose at a record pace of 21% in March thanks to the stimulus checks.  According to the Cambridge Centre for Alternative Finance, bitcoin now makes up to an estimated 0.59% of global energy consumption and consumes more energy in a year than Argentina or Norway.  Sources:  Wall Street Journal and New York Times

BuzzBits

1-Year Market Returns – through 4-30-21:  S&P 46%, Dow 42%, NASDAQ 58%, Russell 2000 75%, 10-year Treasury Bonds -7% - Franklin Templeton

The Stock Market – is a device to transfer money from the impatient to the patient – Warren Buffett

Capital Gains Taxes – States with the highest combined state-federal cap gains tax rates under the Biden proposal:  CA 56.7%, NY 54.3%, NJ 54.2%, NM 53.3%, OR 53.3% - Tax  Foundation

The Kentucky Derby – was won by Medina Spirit, that was purchased as a yearling for $1,000 and cost current owner Amr Zede $35,000.  Trainer Bob Baffert became the winningest trainer in the race’s 147-year history with seven – AP ….. I used to own some thoroughbred race horses and the only one I ever made money on was named after my daughter, Annsley Bear, who broke her leg in a race at Keeneland and I got some insurance money – Buzz

Inflation – Supply shortages could fuel summer inflation.  Shortages of materials including cotton, lumber, semiconductors and steel, along with heightened consumer demand, are prompting concern that inflation is gaining momentum.  “The surge in commodity prices over the past year now guarantees higher goods-price inflation this summer” – John Mothersole, HIS Markit …..Treasury Secretary Yellen said that interest-rate increases might be needed to keep the economy from overheating in light of the Biden administration’s spending plans – Modern Money

Telemedicine – Pre-pandemic, remote med visits were often stymied by insurance companies and state medical boards.  But Covid made telemedicine essential.  That was a boom for Teladoc Health (TDOC).  Teladoc’s total visits increased to over 10 million in 2020 vs. 4 million in 2019 – TIME

Commodity Price Appreciation – from the April lows through the May highs:  Crude 16%, Gold 8%,  Lumber 66%, Coffee 28%, Corn 40%, Copper 19%, Ethanol 32%, Silver 13%, Cotton 17% - Dan Gager ….. The DJ Commodity Index is up 83% over the past year and is up 22% year-to-date.

Trouble in Illinois – Their public employers and retirees with $100,000+ paychecks grew from 109,881 in 2019 to 122,258 in 2020, costing taxpayers $15.8 billion – ZeroHedge

Housing – The severe lack of inventory continues to weigh on the housing market, with sales of existing homes hitting a seven-month low in March.  The number of homes for sale has fallen 28% from a year ago and now sits at an all-time low.  But there are signs that supply could start to grow in coming months.  Soaring prices should simultaneously take some would-be buyers out of the market while enticing more sellers to list their homes, bringing the market into better balance – The Kiplinger Letter

Bond Investors – world-wide face a bleak future – Warren Buffett

Vacation Rental – The average daily cost of a short-term vacation rental, i.e., for 3-7 days, for the summer of 2021 is +26% higher than the average daily cost from the summer of 2019 – AirDNA

A 10+ - is Melinda Gates after she and her hubby Bill announced plans for a divorce after 27 years of marriage.  The Gates are the world’s fourth wealthiest family, with a net worth of $145 billion – Wall Street Journal

Ouch! – LA has seen 465 shootings since January 1, an almost 67% increase over the same period a year ago.  Homicides were up 26%.  Homicides in the surrounding areas increased by more than 113% over the first three months of this year with 64 killings vs. 30 – LA TIMES

Milk Delivery – In the old days, the milkman would deliver to everyone’s house, but no more.  Now Kroger is testing drone delivery technology in Ohio.  The flights will be managed by licensed pilots with Kroger’s partner, Drone Express, and be delivering food packages up to 5 pounds in just 15 minutes – Cincinnati Enquirer

Restaurant Spending – is up 119% this year and is up 5.7% vs. 2019 - Mastercard

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