It is summertime in the markets, which historically means volume is lower and we get strange, nonsensical movements that most often correct themselves once the professionals return from summer vacation. Four years after the pandemic, we continue to move closer and closer to normal. What does that look like this summer?
In the post-pandemic world, thus far Iron Capital has been spot on in terms of economic forecasts, and that is saying something considering how incredibly wrong most of Wall Street has been. We try to do things differently here: We try to be correct, and that means we have to admit when we are wrong so that we know when it is time to change our minds.
“I don’t see the stag or the flation.” ~ Fed Chair Jerome Powell, May 1, 2024
The initial reading for first quarter 2024 GDP came in at 1.6 percent growth, lower than expected and much lower than fourth quarter 2023. Inflation readings have come in above expectations, leading a few pundits lately to claim that we are heading for “stagflation.” Are we?
Inflation is back in the news: The latest reading of the consumer price index (CPI) came in at 3.5 percent. Does this mean all is lost in the Fed’s fight and it is time to sell everything? No, of course not. Nevertheless, Stocks have sold off on this data and of course the pundits are predicting doom as per usual.
Have you ever been on a diet? They all go great to start; next thing you know, you have only 10 more pounds to lose…and then it all slows down. So it goes with the Fed’s fight against inflation. CPI and PPI both came in this week slightly higher than last month. Does this mean the battle is lost? Unlike last month’s inflation surprise, the market has thus far shrugged it off.
