Hey Influence Traders,
It’s awesome when a government report lowers your spending power by actual percentage points overnight.
The consumer price index (CPI), which tracks inflation, rose 0.9% percent last month pushing the annual rate to 6.2% … the highest rate since November 1990.
Even the core rate, which excludes food and energy (which are on fire), was up to 4.6%, higher than September’s 4% rise and the largest increase since 1991.
Inflation has now topped 5% for the fifth straight month.
Most economists have warned that the $1.2 trillion infrastructure bill and $1.75 trillion boondoggle social spending plan will further overheat the economy.
But in a speech at the Port of Baltimore this week, Biden the economist argued that his infrastructure plan would cure the supply chain problem, keep shelves full over the holiday season, and — somehow — lower inflation.
Despite heading out for an Infrastructure-palooza tour, Biden has yet to actually sign the bill.
It looks like he is waiting until Monday to do so.
One theory for the delay is that he plans on holding the infrastructure bill hostage.
The Congressional Budget Office (CBO) is currently scoring the roughly $1.75 trillion boondoggle reconciliation bill.
That score is due out around Nov. 15 (Monday).
If it gets a bad score, which could dissuade the enthusiasm of some on the Hill, Biden could tell House moderates that he will refuse to sign the infrastructure bill unless they pass his boondoggle bill first.
A group of moderate Democrats are holding firm that a final CBO score is a prerequisite to their voting for the boondoggle bill.
And issues continue to simmer over the boondoggle bill in both Houses.
Wealthy Blue state Democrats want to make changes to the $10,000 state and local tax (SALT) deduction cap, but can’t decide how:
- The House has proposed substantially raising the level of the cap.
- Senate Dems want to exempt taxpayers under a certain income level.
It does not look like the boondoggle bill will reach Biden’s desk without a SALT resolution.
Yes, you have to pay a little to protect yourself from cyber threats, but it’s worth it.
Those attacks are on the rise.
The past summer has seen reports of private and public sector breaches.
A California security firm recently announced that foreign hackers have breached nine organizations in the defense, energy, health care, technology and education sectors.
They are attempting to steal key data from US defense contractors and other sensitive targets.
This has caused the Biden administration to take notice and should bode well for cybersecurity companies:
- U.S. companies have to beef up their cyber protocols.
- Enough red flags have gone up indicating that we need to better ensure security.
- Defense in the years ahead will be more about computers than tanks.
- China and Russia have made it clear that we need to expect constant threats to our tech infrastructure.
Earlier this year, the White House announced an executive order requiring higher levels of security from government software suppliers.
More recently, Biden has ordered all federal agencies to review their cyber protocols and to immediately patch holes.
A recent survey found that nearly 75% of tech leaders think the government’s response to the SolarWinds hack and its aftermath has been average or fair and not a single respondent said the response was excellent.
And 33% of respondents said that the chief technology priority for the Biden administration should be defining a national cybersecurity protocol.
On top of executive action, the new infrastructure bill includes $50 billion to make infrastructure more resilient to both cyberattacks and natural disasters.
We Are Watching Cyber Firms
When Biden put out his emergency cyber order to all Fed agencies that they needed to review and patch, we went long Mandiant, Inc. (Ticker: MNDT) and FireEye, Inc. (Ticker: FEYE) in CapGains.
In the past, we’ve looked at Palantir Technologies Inc. (Ticker: PLTR), which is a solid play on cyber security and should benefit from infrastructure spending.
I like PLTR as a long-term hold, but the stock is very “range bound” so trading guru Andrew Giovinazzi has had to be creative in his trading strategies.
In addition, we are watching:
- Ping Identity Holding Company (Ticker: PING)
- CrowdStrike Holdings (TICKER: CRWD)
- CyberArk Software (TICKER: CYBR)
- Proofpoint (TICKER: PFPT)
DC is creating cyber ripples in the market.
Cutting Through the Noise for You.