Could be the market was saying OK to the inflation numbers and that tomorrow bond rates will go up/bond prices will go down. I've seen this before.
Crazy indeed.
Inflation June
- Thread starter stollcpa
- Start date
Crazy indeed.
I'm playing a couple angles. The other day I had several runs in a row with a bunch of heavy stuff. I don't like heavy stuff. Mentioned to the owner that the microaggressions were adding up and the environment was starting to get hostile.
Physically heavy. Like stacks of rotors and big commercial batteries and cases of antifreeze. Emotionally heavy is no big deal; I can reduce a grease monkey to tears if necessary.
If you have some money that you want to risk for a high potential return, then why not? It's an interesting risk/reward play.
This is why I don't even try. The market does what it wants and rationale concepts are shown to be incorrect often enough where you can't make money. HODL to my index funds.
I’ve always tried to follow the Peter Lynch model of investing.
Investing in Bitcoin would certainly run afoul of anything Lynch would have invested in.
I don't do bitcoin or other crypto. Risk averse, I guess. I asked my advisor about the 5-10% or so of my retirement assets that is invested in some individual stocks and was advised that if I am otherwise on track with 401Ks and IRAs that are in mutual funds, under 10% in more speculative things isn't concerning.
@twenty02 PPI data still pointing towards massive inflation pressure
The Producer Price Index for final demand increased 1.1 percent in June, seasonally adjusted, the
U.S. Bureau of Labor Statistics reported today. This rise followed advances of 0.9 percent in
May and 0.4 percent in April. (See table A.) On an unadjusted basis, final demand prices moved
up 11.3 percent for the 12 months ended in June, the largest increase since a record 11.6-percent
jump in March 2022.
The Producer Price Index for final demand increased 1.1 percent in June, seasonally adjusted, the
U.S. Bureau of Labor Statistics reported today. This rise followed advances of 0.9 percent in
May and 0.4 percent in April. (See table A.) On an unadjusted basis, final demand prices moved
up 11.3 percent for the 12 months ended in June, the largest increase since a record 11.6-percent
jump in March 2022.
I would suggest you look at it as an insurance policy against fiat currency. A 2%-3% position is sufficient if you’re not completely sold on Bitcoin or have a lower risk tolerance. I do think it’s extremely foolish to not have some allocation to Bitcoin. I linked a good video on the history of currency’s losing reserve status overtime. It will happen again (the question is when?) and I think Bitcoin will replace it.
Yeah, I sold everything in spring 2020, figuring the markets were going to crash. Then I learned the meaning of the phrase "don't fight the Fed".
Now things are more rational than then, I think, despite the occasional emotional hic-cups. The false reliance on borrowing has been proved unreliable.
Bond yields are higher today, and the 2-year/10-year yield curve inversion widened. Not surprising.
U.S. Treasury yields moved higher on Thursday as major bank earnings commenced and traders continued to digest the higher-than-expected 9.1% inflation print for June.
The 2-year Treasury yield, which is more sensitive to monetary policy changes than its longer-term counterparts, rose about 9 basis points to 3.232%.
That's created a wide gap, or inversion, between the 2-year and 10-year notes, which on Thursday notched another record dating back to 2000. Yield-curve inversions, or when shorter-term government bonds have higher yields than longer-term ones, are generally viewed by markets as harbingers of recession.
The yield on the benchmark 10-year Treasury note rose 9 basis points to 2.995%, while the yield on the 30-year Treasury bond traded 5 basis points higher to 3.118%. Yields move inversely to prices, and a basis point is equal to 0.01%.
Thursday will see the release of both the month-on-month and year-on-year PPI, or producer price index, for June, as well as the core PPI. The PPI is a monthly calculation of change in prices taken by domestic producers. Unemployment figures in the form of jobless claims will also be released.
The U.S. Federal Reserve could deploy a massive 100 basis point interest rate hike to combat inflation, some analysts predict. Inflation in the U.S. is at its highest in 40 years. Atlanta Fed President Raphael Bostic, when asked by reporters about the likelihood of the hike, replied, "Everything is in play."
Investment firm Invesco in a note this week said that it expects inflation to recede as the year progresses. Ben Gutteridge, director of model portfolio services at the firm, told CNBC on Thursday that the stock market reaction to the latest inflation print has been "relatively benign, which could mean that markets are looking further ahead to the future, at least in part on the back of commodity prices slightly weakening... markets are maybe thinking that we've reached peak inflation."
On Wednesday, Bank of America economists said in a note that they expect the U.S. to enter a "mild recession" this year. They noted that incoming data points to slowing momentum for the economy and that inflation seems to be hindering consumer spending.
Steve Forbes went on a fatalistic rant:
This episode of What’s Ahead warns of a brewing storm that will be global in nature and could wreak immense damage, economically and politically.
Numerous nations have amassed immense debt. The binge-borrowing began before the pandemic. Now with inflation rampant, interest rates are rising, making it unlikely that many of these governments will be able to service their obligations. Fueling the unrest are growing shortages of food and fuel.
It’s not just poor countries that are facing ugly financial squeezes but also middle- and higher-income countries.
The European Central Bank (ECB) has been amassing immense amounts of bonds for more than a decade. Japan’s national debt, now more than twice the size proportionately of the U.S.’, is rapidly expanding. The U.S., with a record peacetime debt, has been no paragon of financial virtue.
Positive, straightforward solutions are being ignored. Even on the food front, the U.S. and Europe still haven’t come up with imaginative ways to get needed grain out of Ukraine.
He's not wrong . . . and he might not be right either. It all depends on the choices we make.
I agree and it's volatility is nothing that Lynch or any fundamental investor would consider.
