The Summer driving season is officially upon us. The period from Memorial Day weekend through Labor Day weekend draws the most cars on the road for the year. No surprise, it’s better weather and Summer vacation that drives it. 37 Million motorists are expected to hit the road this Memorial Day weekend. Three-quarters of family travelers go by car to a vacation spot over the Summer. Even though it feels more like February than May around the Bay, cars will be on the road.
This will also be the most expensive driving season since 2014. Gas prices have jumped. The national average is $2.96 per gallon. That’s sharply up from $2.37 last Memorial Day weekend. The most expensive gas is in California. The cheapest gas can be found in Mississippi. If you’re hitting the road in the Southeast this weekend, it will cost quite a bit less than for those of us on the West Coast. Make sure to be prepared because AAA says they assist over 7 Million drivers with roadside emergencies during the Summer driving season. Battery jumps, tire swaps and lock-outs are the most common culprits.
Americans are hitting the friendly skies as well. In fact, this Summer is expected to see a record 246 Million passengers on airplanes. There are over 3 Million seats that depart daily from airports in the United States. Many will head overseas for an international vacation. But considering the Dollar’s strength, the majority of Americans will likely opt for staying on domestic soil this Summer. Conversely, more international travelers might make their way to the US, as their home currency goes further in America. Both Orlando and Los Angeles are coming off record tourism years and are poised for a big Summer. Tiffany just reported a stellar quarterly earnings, and highlighted an infusion of international shoppers as a major driver for sales. Travel is the theme. It’s good for the economy.
Road trips mean fuel, both for the car and the people. Roadside drive-thru windows get really busy too. If you hadn’t heard, you will still likely get a straw in your drink as you stop for food on the road trip, at least for now. McDonald’s shareholders voted down a proposal to remove plastic straws at its 37,000 locations. A few cities in California have already banned plastic straws, while Alaska Airlines plans to eliminate plastic straws and stirrers on its flights. There’s a big movement. The push to ban plastic straws has been getting more attention by the day. New York City is feeling pressure to ban straws, on top of plastic bags and bottles. Seattle and Miami Beach have already passed bans on plastic straws. Malibu, California, is banning plastic utensils in addition to straws. There’s a reason for the movement. A recent study suggests that over 90% of plastic used in the US is not recycled. Did you know that Adidas makes running shoes made from plastic collected in the ocean? The German company sold over 1 Million pairs last year. That number is expected to grow to 5 Million this year. Innovative solutions are always the answer. It’s investable. It’s what makes a market.
Crude prices fell on Friday on rumors that the Saudi’s and Russia might increase supplies. It’s not having a material impact on the price of gas. The June 12 Summit with North Korea is off, but may be back on. We will no doubt learn more on these developments over the weekend. Trade is perhaps the most important issue economically, and negotiations with China and on NAFTA are moving like the tide, back and forth, back and forth. There is reason for optimism on trade. We need to trust but verify. Verification is an important word, particularly these days. There’s a lot of uncertainty right now, and that’s the one thing the Market just does not like.
Have a nice weekend. The Market will be closed on Monday in observance of Memorial Day. Our office will be closed too. Our appreciation and respect goes out to those who risked their lives to protect our great nation. We will be back, dark and early on Tuesday.