Today’s Economic Shakers

A wave of economic data came out this morning, and Wall Street isn’t impressed...

U.S. stock futures are trending slightly bearish just prior to Tuesday’s opening bell, as data from both the Labor and Commerce Departments greeted investors this morning.

The numbers were mixed, however, which seemed to keep the futures markets basically unmoved following the data release. That may change throughout the day as the reports are digested by investors.

The Labor Department reported that the consumer price index was basically flat in July, rising a mere 0.1% for the month, more or less on track with consensus expectations of analysts. That followed June’s 0.2% increase, which was the fifth in a row for the index, which is a reflection of the cost of living in the U.S.

The index doesn’t include the higher volatility components of food and energy, and is only one of several consumer-related indices used by the Fed to measure overall inflation.

Additional data from out of the Labor Department’s showed that food prices basically remained the same compared to the previous month, while the cost of energy dropped by 1.6% compared to June. It was the first drop in over five months.

The Commerce Department, on the other hand, had better news. July’s housing starts, a measure of the health of the housing industry, beat expectations, climbing by 2.1% above June’s stats. The number just beat industry analysts’ expectations, and the increase was enough to post the second-best gains since the crash of 2008.

The Hot Take-Away —

Though inflation is often regarded as a negative event by the public, the fact is that a reasonable increase in this metric is a positive, and a lack of growth in the index indicates a decrease in consumer demand, a sign of a weakness in the country’s consumer-based economy.

Keeping inflation at the 2% level is a big mission for the Federal Reserve, and its consistent recent failure to do so may be more than enough to keep its foot off the pedal of the rate-increase accelerator.

Deflation is a big concern, as it should be with negative interest rates across the globe reflecting an intrinsic lack of growth in a key economic metric.

That makes the morning’s consumer index data more important than the market may be reflecting, and in the long run trumps any positive news from the housing markets.

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Warren Buffett takes a heaping serving of Apple for his company’s portfolio...

Apple Inc. (AAPL) got a resounding stamp of approval from the legendary investor, according to the recent release of the holdings of Berkshire Hathaway (BRK.B), Buffett’s holding company.

The quarterly filings of large hedge funds that is required by the Securities and Exchange Commision (SEC) is eagerly awaited by investors, as it gives a glimpse into the holdings of key players in the hedge fund industry.

The recent filing by BRK.B shows that Buffett made a huge bet on AAPL, increasing his stake in the company by a staggering 55%, which means that his company now owns 15.23 million shares.

Apparently, however, Buffett was something of a contrarion in regards to AAPL, as a number of big funds sold off some or all of the company’s stock.

Greenlight Capital cut its own stake in AAPL by 16%, while legendary investor George Soros divested the portfolio of his family holding company, Soros Asset Management, of the stock as well.

For those familiar with Michael Burry, the hedge fund manager featured in the film “The Big Short”, it is interesting to note that he sold off his entire position in AAPL. Remember, this is the guy who was way ahead of the curve of the whole 2008 financial crisis.

Meanwhile, AAPL seems untouched by all the hedge fund news, as the stock is up by 0.50% this morning, running contrary to the broader market’s small losses.

The Hot Take-Away —

Buffett is renown as a “value investor”, someone who is in a position with a multi-decade time horizon perspective. That’s quite a different take on a company that has been regarded as a growth stock for most of its life, though Buffett’s assessment should definitely be highly regarded. Hard to argue with one of the world’s richest individuals.

Also worth noting is that the recent filings reflect last quarter’s positions, and offer no indication of current portfolio constituents for the hedge funds.

Short positions aren’t reflected either, so in reality the filings are more of a glance in the rear-view mirror than a gauge on the speedometer.

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