Inflation reflects a tradeoff: goods & services vs government liabilities. Though stimulus-driven demand is easing, supply constraints from labor and global imbalances continue. Meanwhile, Fed policy is nowhere close to “normalized.” Here’s part of the reason labor is still tight pic.twitter.com/RcJ4DwXXD8
shipping costs down, prices of oil, copper, cotton and many commodities down, bond market saying inflation will be 2-3% a couple years out, etc
Do you recall making the same claim for June?
Until the #s came out?
Do you shop at all? Name one item that has seen a price reduction.
right, gasoline is down.
but I'm distinguishing between 'signs' and 'actual prices'
the inputs are falling in price. that should slow, end, moderate inflation at the consumer level.
hoo boy a bonanza of a jobs report. Stocks down a percent. bond prices will be down a percent, and we're back on 'the Fed must destroy the economy to save it' watch. This will hurt. Do we rush back into value, anticipating higher interest rates?
unemployment 3.5%. What a time to be alive. Well we know there is no recession going in, with that kind of massive job creation.
We just had a bear market, stocks down 25%. Stocks are still down 15% or so.
When there's a bear market with no recession, you don't get much more of a decline than that.
So people are seeing this as an 'all clear' and disregarding the Fed as a harmful force on stocks.
Plus, everyone now is understanding that inflation is coming to a quick end.
That makes no sense to me. Fed is forced to raise rates since labor costs are becoming imbedded, lower interest rates means OER/housing stabilized at higher level, energy likely to go back up in the fall, S&P 500 EPS likely to be downgraded in coming months. List of negatives goes up, not down.
We just had a bear market, stocks down 25%. Stocks are still down 15% or so.
When there's a bear market with no recession, you don't get much more of a decline than that.
So people are seeing this as an 'all clear' and disregarding the Fed as a harmful force on stocks.
Plus, everyone now is understanding that inflation is coming to a quick end.
That makes no sense to me. Fed is forced to raise rates since labor costs are becoming imbedded, lower interest rates means OER/housing stabilized at higher level, energy likely to go back up in the fall, S&P 500 EPS likely to be downgraded in coming months. List of negatives goes up, not down.
I think you might be overthinking it.
there's no recession. So corporate profits should be ok. So stocks are safer.
Sure, the Fed could work to reduce the valuation on those earnings. But stocks are *already* down, reflecting that. They've already been punished. Without a recession to punish them further, there's a margin of error.
That makes no sense to me. Fed is forced to raise rates since labor costs are becoming imbedded, lower interest rates means OER/housing stabilized at higher level, energy likely to go back up in the fall, S&P 500 EPS likely to be downgraded in coming months. List of negatives goes up, not down.
I think you might be overthinking it.
there's no recession. So corporate profits should be ok. So stocks are safer.
Sure, the Fed could work to reduce the valuation on those earnings. But stocks are *already* down, reflecting that. They've already been punished. Without a recession to punish them further, there's a margin of error.
Perhaps. One thing is for sure until government, corporation, and individuals can borrow and spend with impunity there will be no severe bear market. Once that changes the ramifications for everyone will be unprecedented.
We just had a bear market, stocks down 25%. Stocks are still down 15% or so.
When there's a bear market with no recession, you don't get much more of a decline than that.
So people are seeing this as an 'all clear' and disregarding the Fed as a harmful force on stocks.
Plus, everyone now is understanding that inflation is coming to a quick end.
That's how it looked to me, and I did a little buying this morning. It didn't drop as much as I would like to feel great about making a bigger move, which i take as a sign that the market feels worst case scenarios were already priced in, and it's turning out to be not as bad as all that.