In his podcast addressing the markets today, Louis Navellier offered the following commentary.
If you wish to listen to this commentary, please click here.
Unchanged CPI
The big news this week was the Labor Department on Wednesday announced that the Consumer Price Index (CPI) was unchanged at 0% in July, which was much better than economists’ consensus expectation of a 0.2% increase and great news. In the past 12 months, the CPI decelerated from a 9.1% annual pace in June to an 8.5% annual pace in July.
Q2 2022 hedge fund letters, conferences and more
The core rate of inflation, excluding food and energy, rose 0.3% in July and 5.9% in the past 12 months. Food prices rose 1.1% in June, while energy prices declined 4.6%, led by an 11% decline in fuel oil and a 7.7% decrease in gasoline prices. Interestingly, electricity prices rose 1.6% in July and have risen 15.2% in the past 12 months due to higher coal and natural gas prices. I should add that natural gas prices declined 3.6% in July, but have risen 30.5% in the past 12 months.
Also notable is that used car & truck prices declined 0.4% in July and have risen 6.6% in the past 12 months, while new vehicle prices rose 0.6% in July and 10.4% in the past 12 months. Shelter costs rose 0.5% in July and 5.7% in the past 12 months due largely to the fact that rental prices rose 0.7% in July and 6.3% in the past 12 months. Overall, even though the core inflation is still rising, the big drop in energy prices was welcome and is helping Treasury yields moderate.
Last Rate Hike
These lower Treasury yields will take pressure off the Fed, so I expect that September 21st will be the last Fed rate hike.
We are at the end of earning season and some analysts are starting to cut estimates so I'm trimming which I normally tend to do towards the end of the earnings season. I do not want to get in the way of the analyst community since they control the stocks a lot more than anybody else. They follow each other and move in herds and packs.
But popping stocks after a nice beat shows that earnings are working. Traditionally, August is a tough period but the market was so oversold. So, I think we will be okay.
I believe that the market is going to have a big surge after the last Fed rate hike on September 21st. Then we will benefit from the quarter-end window dressing. Then, we will go in October to prepare for another earnings announcement season.
Coffee Beans
According to a survey of American respondents, 18% of those who own investments also have money put into cryptocurrencies while 15% said they intend to invest money in coins in the next two years. The increase in popularity is likely spurred on by the profits made in the recent past, with total profits from cryptocurrencies amounting to around $163 billion in 2021. Source: Statista. See the full story here.
