Inflation Is Bubbling

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In his podcast addressing the markets today, Louis Navellier offered the following commentary.

If you wish to listen to this commentary, please click here.

Unsettling Interest rates

Interest rates are still meandering higher and that is an issue that is unsettling the whole stock market. The 10-year Treasury bond yield is now 3.7%. Just last week it was 3.34%, so that’s a big increase.

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Inflation Bubbling

There's this perception that inflation is brewing, it's bubbling. We're going to get the CPI report next week and the big component that we have to watch out for is called owners' equivalent rent. It rose from November to December but it's important that the owners' equivalent rent cracks because the Fed is raising interest rates and killing the housing market.

There was a fascinating MarketWatch article on Wednesday that asserted that there were massive seasonal adjustments to the January payroll number, which grossly exaggerated and overstated actual payroll results. The fact that these seasonal adjustments made the January payroll surge just before the State of the Union speech is obviously an interesting coincidence.

Also interesting is that Labor Secretary, Marty Walsh, resigned before the State of the Union, even though he was deemed the “designated survivor” among the Biden Administration’s cabinet members.

This MarketWatch article also points out that the next five months will have “negative” seasonal adjustments and implied that the upcoming monthly payroll reports may be disappointing, which may cause the Fed to hesitate on raising key interest rates.

Energy Oasis

In the meantime, energy prices are headed higher because Russia announced that it was cutting its March crude oil production by 5% or 500,000 barrels per day. Deputy Prime Minister Alexander Novak said, “As of today, we are fully selling the entire volume of oil produced, however, as stated earlier, we will not sell oil to those who directly or indirectly adhere to the principles of the ‘price cap’.”

There will be more Russian crude oil cuts in the upcoming months as sanctions bite, pipelines back up, and force Russia to cap more wells. Already, Russian crude oil production has fallen by 1 million barrels per day in the past year and another 2 to 3 million barrels may be lost as Russia is forced to shut down more of its domestic crude oil production.


Further, as global demand rises, crude oil prices are expected to hit $100 per barrel in the upcoming months and $120 per barrel prices are very possible during the summer months when there is peak demand. Energy stocks remain the oasis.

I want to point out that stocks are normally oscillating but I'm noticing this is especially true with the ESG-related stocks, such as Enphase Energy and other stocks that might be in an ESG portfolio, since ESG funds are getting hit with redemptions. Even though Enphase is an outstanding stock, it can get hit when the ESG accounts and funds get hit with redemptions.

Coffee Beans

The U.S. has the most expensive healthcare in the world, amounting up to $12,318 per person in 2021. Yet, the U.S. lags behind other nations in several aspects such as life expectancy and health insurance coverage. In second-placed Germany, healthcare costs amounted to $7,383 per person in 2021 - 40% lower than in the US. Source: Statista. See the full story here.