A Recession Is The Only Way To Break Strong Inflation Trends

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In his Daily Market Notes report to investors, Louis Navellier wrote:

Recession To Break Inflation

Russia and stagflation concerns roil the markets. 

Stocks pulled back hard yesterday afternoon on fears of global slowdown, on fears that hawkish efforts by central banks to rein in inflation may overshoot and risk pushing economies into a recession. It’s a rational fear with a yield curve that is dancing with becoming inverted, historically a precursor of past recessions.

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History also says that a recession is the only effective way to break strong inflation trends.

Opportunity In Commodities

The difference this time is that unemployment is currently very low along with a huge number of job openings, and the very unique circumstances of a global post-pandemic reopening trade, all of which should support demand, large levels of cash in the hands of both consumers and companies, and throw in the unpredictability of the Ukrainian invasion and unprecedented sanctions employed against Russia.

This will present opportunities in commodity companies like Freeport-McMoRan (NYSE:FCX) with copper and Cleveland Cliffs (NYSE:CLF) in steel, along with the energy complex on higher oil prices and fertilizer cost with higher food prices driving demand.

Crude oil is down 2% this morning but still over $112 for WTI, interest rates climbing again after a strong drop on yesterday's market correction.  Stocks opened modestly green though the NASDAQ has since turned slightly red.

EV Plays

Electric vehicle plays are all up on being more attractive with gasoline prices so high with Tesla (NASDAQ:TSLA) now up 30%, back up over a trillion-dollar market cap, in the last 8 days.

Coffee Beans

The CDC is predicting that the BA.2 variant of Covid-19 – also called the stealth variant – will become dominant in the United States soon. Data shows that the variant was responsible for around 35% of cases in the country as of March 19, up from around 23 percent a week earlier. The BA.2 variant already made up almost 40% of cases in the U.S. Northeast. Source: Statista. See the full story here.