Inflation Continues To Be Bullish On Stocks – The Closing Bull May 27th
Quick Summary:
In this week’s Closing Bull, we’ll be talking about inflation continuing to bullish on stocks. Inflation rates continue to rise at a rate not seen since the 1980’s. Gas prices continue to surge. The world’s economic elite meet for the first time in 2 years at the World Economic Forum in Davos, Switzerland. The International Monetary Fund says the economic horizon has “darkened”, on the bright side there may be the possibility for safe passage corridors for cargo ships coming through Ukraine possibly opening food shipping corridors. Lastly Snap Inc takes a hit and our interesting fact of the week.
Key News:
Market recap.
Inflation bullish on stocks.
The inflation surge continues.
Gasoline prices continue to jump at the pump.
The world’s financial elite gather in Davos, Switzerland.
The International Monetary Fund says the economic horizon has “darkened”.
Safe passage corridors for cargo ships with food coming out of the Ukraine.
Snap loses $15B in market cap.
Interesting fact of the week.
Read the Transcript
Hi and welcome to my financial markets’ re-cap for the week.
At last signs of life in the stock market as things start turning around. Obviously, from our point of view, it’s been great to see the latest entry gain a great deal from this move higher.
Still a little to go in this forecast higher, but, so far so great!
That was the system update, what is happening in the news?
News on inflation today was bullish for stocks. The core personal consumption expenditures price index, the Fed’s preferred inflation gauge, rose 4.9% from a year ago in April, this was in line with expectations and reflected a slowing pace from the 5.2% reported in March. A bullish sign for stocks.
Of course, inflation for the past several months has been moving at a pace not seen since the early 1980s. The inability of supply to keep up with demand has pushed prices higher, clogged global supply chains and the war in Ukraine that has sent energy prices skyrocketing and led to fears of food shortages.
While this inflation report has generated some relief in the market and no doubt the White House, gasoline prices will be a factor again when the May numbers come out next month. Prices at the pump have jumped again, surging more than 11% from a month ago and 51% from this time last year.
Speaking of inflation, the world’s financial elite gathered in Davos, Switzerland, at the World Economic Forum, and the bleak global economic outlook was the number one talking point.
With food being the big worry, the surge in food prices was raised as a central threat by the director of the International Monetary Fund that said during a panel on Monday that the economic horizon has “darkened” due to the combination of the Russia-Ukraine war, tightening financial conditions, dollar appreciation and the slowdown in China.
Referencing the commodities price shock in many countries, and in particular food prices.
It wasn’t all bad news though as the news wires reported the possibility of a safe passage corridors for cargo ships with food coming out of Ukraine this week. I think this glimmer of light
calmed the market this week and hopefully will have a positive impact on lowering food costs.
In tech, there was a big shock in the social media world this week. Snap lost $15B in market cap on Tuesday. Snapchat said it expects to miss earnings targets for the quarter and will slow hiring. They blamed economic conditions that’ve “deteriorated further and faster” than anticipated.
Despite the market rebound later in the week, Snap is still down considerably and may take a while to recover.
Shares plummeted as much as 43% on Tuesday. The worst day ever for the company.
Interesting fact this week:
NYC’s last public payphone was removed yesterday, never mind everyone having a phone in their pocket, but the thought of using a payphone is just so gross in today’s western world, but that how is used to be! How the world has changed.
That’s it from me, It’s Friday, time to down tools, thanks for watching and bye for now.
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