Tag Archives: CPI
Will Inflation Actually Be Transitory?
“Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” – Milton Friedman “If we do see what we believe is likely a transitory increase in inflation … I expect that we will…
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Low Inflation isn’t Unusual
Fed watchers and bond holders worry that inflation could spike, tempting the Fed to boost rates much farther than the current half percentage point the market expects in the rest of 2018. With the Federal Open Market Committee, the central bank’s policy makers, meeting today and tomorrow these concerns are front and center. This morning’s…
- Categories Blitzer's Insights, Equities, Fixed Income, Strategy
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- Blitzer's Insights, Equities, Fixed Income, Strategy
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Inflation: Benign for Now
Having broken through 2% in January 2018, the 10-year U.S. Treasury breakeven rate (as measured by the difference between the S&P U.S. Treasury Bond Current 10-Year Index and the S&P U.S. TIPS 10 Year Index) has continued to increase, reaching a YTD high of 2.18% on April 23, 2018. As of May 14, 2018, the…
- Categories Fixed Income
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3 Reasons To Love Equities When Rates Are Rising
Equities haven’t been the most lovable asset class lately but there are reasons to love them despite these prickly times. The first reason to love equities in rising rate times is that they have gained significantly. Since 1971, the S&P 500 (TR) has gained about 20% on average in rising rate periods, has gained 8 of…
- Categories Equities, S&P 500 & DJIA
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- Equities, S&P 500 & DJIA
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Inflation News and Fears
Two weeks ago inflation fears sparked by a surprise jump in wage gains sent the markets into a tail spin. This week will deliver two rounds of inflation news with the Consumer Price Index (CPI) on Wednesday and the Producer Price Index (PPI) on Thursday. Month to month changes in both the CPI and PPI…
- Categories Blitzer's Insights, Equities, Fixed Income, Strategy
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- Blitzer's Insights, Equities, Fixed Income, Strategy
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Energy Stocks Beat Oil Futures In Rising Inflation
There may be a legitimate concern about rising inflation since inflation has been under the Fed’s target for years and there is now very low unemployment with signs of accelerating economic growth. The low unemployment rate and strong growth are probably positive for the stock market and the tax cuts may provide even more upside. However,…
- Categories Commodities, Equities, S&P 500 & DJIA
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- Commodities, Equities, S&P 500 & DJIA
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Dollar’s Revival Adds New Life To These Commodities
It makes sense that a strong US dollar is generally bad for commodities since as the U.S dollar strengthens, goods priced in dollars become more expensive for other currencies. However, historically the U.S. dollar has a negative correlation of only about -0.30 with the S&P GSCI as shown in the chart below using data since 1970: This may…
- Categories Commodities
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- Commodities
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Asia Fixed Income: A Closer Look at Indian Bonds
The CPI inflation rate in India rose as expected to 5.0% year-over-year in May 2015(from 4.9% in April), led by a higher crude oil price. The market is now expecting the Reserve Bank of India to remain on hold, in contrary to their expectation that most other emerging market policy rate decisions will have a…
- Categories Fixed Income, India
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- Fixed Income, India
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February Made Bonds Shiver, While Energy Kept High Yield Warm
Investment-grade corporate yields widened by 15 bps, as the yield-to-worst of the S&P U.S. Issued Investment Grade Corporate Bond Index moved from a level of 2.16% at the beginning of the month to 2.76% at the end of month. The price return of the index was -1.44% MTD, but 30 bps of coupon return brought…
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Are TIPS Insurance on a Sunny Day?
The current quote of NYMEX crude is lower by $2 today as the price action of crude oil has been on a downhill slide since the end of June 2014. The news is loaded with stories of oil and its effects on consumers and the economy. Min Zeng of the Wall Street Journal published “Closely…
- Categories Fixed Income
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