Comment by JumpCrisscross
16 hours ago
> there is too much money trying to pour into the market
Keep in mind that inflation ran over 7% annualized in April [1].
16 hours ago
> there is too much money trying to pour into the market
Keep in mind that inflation ran over 7% annualized in April [1].
The vast majority of that was fuel.
> vast majority of that was fuel
Everything else is up around 3% YoY. And if energy and transportation are up double digits, and producer prices are up double digits, other consumer prices will follow.
Yea and the cost of fuel has zero downstream effects on the economy.
From that doc, prices went up 0.6% in one month, multiple by 12 get 7.2% annual inflation rate.
Inflation is a measure of the cost of living. It's not got loads to do with large-scale, institutional investments.
> Inflation is a measure of the cost of living
The faster your cash loses value, the stronger your incentive to trade it for something else. That something else can be financial assets.
> It's not got loads to do with large-scale, institutional investments
For investors, particularly retail investors, the consumer price index is most relevant. But for whatever it's worth, producer prices are up over 16% in April (7% excluding "foods, energy, and trade services," which jumped over 50% annualized) [1].
To be clear, I'm floating a hypothesis here. I have seen no evidence linking inflation to demand for these companies' shares. (If anything, it should be the inverse.)
[1] https://www.bls.gov/news.release/ppi.nr0.htm
That depends. Inflation is a measure of the cost of living in terms of currency. It can be high either if goods and services required for living become scarce, or if currency supply increases. Currency supply increasing does affect asset prices.
Yes, but they're not directly correlated. Of course events can affect them both! Going to war would both increase the cost of living and (some) asset prices would go way up. But that doesn't mean they should be measured together like that.
Inflation then is already higher. Cost of living is driven mostly by rent