Welcome News – If sky-high inflation is the reason stocks have tanked this year, then falling inflation should help stocks recover… and it’s already happening. The S&P 500 Index has rallied 15% from June lows, and I think it’s because forward-looking investors believe inflation is beginning to recede. We’ll get evidence of this important change on Wednesday and Thursday, as the Bureau of Labor Statistics reports monthly data for Consumer and Producer prices. Specifically, three of four indicators are expected to show significant declines MoM. This is a big deal. It is welcome news, and we don’t need to overthink it. Falling inflation is good for stocks.
Lower Inflation Expected
New Data Next Week
Source: Bloomberg data
As of 8/9/22, the author holds positions in:
Affirm Holdings, Inc., Axcelis Technologies, Inc., Blackstone, Inc., Block, Inc. , Boeing Company, Boston Properties, Inc., Builders FirstSource, Inc., ChargePoint Holding, Inc., Coinbase Int’l Inc., Compass, Inc., Curaleaf Holdings, Inc. , Energy Transfer LP, Facebook, Inc., Iveric Bio, Inc., Joby Aviation, Matterport, Inc., MKS Instruments, Inc., Neoleukin, Nine Meters Biopharma, Nutanix, Inc., Nvidia Corp., NXP Semiconductors, Plug Power, Inc., Qualcomm, Inc., Rapid7, Inc., Rapt Therapeutics, Inc., Sensata Technologies, Shift Technologies, Inc., Silvergate Capital Corp., SoFi Technologies, Inc., Sunnova Energy Int’l, SVB Financial Group, Unity Software, Inc., Wynn Resorts, Ltd., XPO Logistics, Inc.
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