Could The Delaware Valley Be Facing Another Era Of 70s Style Inflation? patch.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from patch.com Daily Mail and Mail on Sunday newspapers.
It was only last week we looked at some signs of future inflationary pressure from China as its producer price number rose to 4.4%. This morning we discovered what impact these pressures have had on the UK.
The annual rate of inflation for materials and fuels purchased by manufacturers (input prices) was 5.9% in March 2021, up from 3.3% in February 2021 . This is the fourth consecutive month the rate has been positive, following 10 consecutive months of negative annual inflation between February 2020 and November 2020.
The pattern is part of the story of the pandemic as we saw declines in demand driving lower prices and now the beginnings of recovery seeing higher ones. One point of note is that yesterday was the anniversary of the plunge in oil prices with futures on the West Texas Intermediate or WTI benchmark going as low as minus 40 US Dollars. I shall return to that issue in a bit but the UK numbers have not reached April yet. We can see what has driven the move below.
The latest jobless claims report from the week of April 3
rd wasn’t great. This is one of the bears’ last credible arguments that the labor market isn’t accelerating. However, we wouldn’t hang our hats on this metric because of how unreliable claims have been since the pandemic began. Data has been all over the map due to mistakes and fraud. It’s entirely possible that claims drop 100,000 in a few weeks due to some type of adjustment we don’t realize needs to occur. Since the ISM surveys show companies can’t find enough workers and the BLS report showed almost 1 million jobs added in March, it’s hard to believe the labor market isn’t rapidly improving.
The bond market might, however, assuming Kashkari’s quote is true.
Fed s Kashkari says he would not panic if he saw a 4% inflation rate-BBG LongConvexity (@LONGCONVEXITY) April 8, 2021
We are reposting a piece, which we recieved tremendous pushback when it was posted. Now the Fed Heads are climbing aboard. NK is one of the smartest but a bit of an opportunist, in our opinion.
Wall Street’s “everything is bullish” mantra is why the U.S. stock market cap to GDP is now close 200 percent (almost 50 percent above prior bubble peaks) and why we now see no way out of this rabbit hole but to print, print, print. And print some more.
Stocktake: Broad market rally still looks healthy Broad-based nature of rally suggests any pullback will not be a long-lasting affair
Tue, Apr 6, 2021, 05:00
Market sentiment has become worryingly bullish in recent weeks and many observers think stocks have run too far, too fast. Nevertheless, the broad-based nature of this rally suggests any pullback will not be a long-lasting affair.
Last week, 94 per cent of S&P 500 stocks were trading above their 200-day moving average – the highest reading since 2013, says Ritholtz Wealth Management’s Michael Batnick.
Last year, many worried the rally was being kept afloat by a narrow bunch of large-cap tech stocks. Today, none of the five biggest tech companies are at new highs, but the index is doing just fine without them.