Just back from a week in the Yucatan in Mexico, and I can attest what Marriott and Hilton said last week: travel is really strong. The Yucatan is sometimes referred to as the “anti-Cancun” — much more remote and laid back, though its main attractions are less than four hours from Cancun. Still, even in remote outposts like Uxmal, Sisal Beach, and Celestún Beach, there were plenty of tourists, and not just Americans — lots of French and German travelers as well. The soft landing is still alive, but so is inflation Watching the stock market from Yucatan last week, it was pretty clear that firmer inflation numbers from the consumer price index and producer price index meant the glidepath to lower inflation will likely be bumpier than the bulls have been hoping for. The problem is clear: We have to figure out the glidepath of the inflation decline. As long as it is taking longer than expected , it’s harder to get things (like growth stocks) working. However, we heard last week from a number of restaurant chains, and prices are indeed coming down for key products, including avocados (Chipotle), Tyson (beef), Shake Shack (also beef), and Bloomin’ Brands (lobster, chicken and pork). Some of these declines were not trivial: Tyson reported beef prices down 9% year-over-year, though chicken prices did rise. Home Depot acknowledged lower lumber prices played a role in its lower than expected revenues. The company beat on earnings but was light on revenues, due largely to a decline in lumber prices. Company officials gave a muted outlook due to expectations of flat consumer spending. “We know that our market has seen a gradual shift that reflects the broader shift in the economy, in consumer spending from goods to services,” CFO Richard McPhail told CNBC. We’ll get more inflation data this week with the personal consumption expenditures price index on Friday. The good news is that other economic data indicates that the economy is very strong, particularly on the jobs…
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