Economy crash =/= stock market crash?

masonic

sevenhills said:

masonic said:

There will be a very small proportion of people whose personal inflation matches any form of RPI.

It seems to be oil and energy which is driving inflation, any measure of inflation reflects that being between 5%/15% of persons income will be more accurate than the CPI measure.

April was a good time to tease out energy prices from the mix (since there isn't sufficient granularity in the basket of goods to know exactly what weighting is applied to gas and electricity, for example - they fall under 'Housing and household services'. April saw a 46.5% average increase in prices on the month due to the price cap, which led to a 1.86% contribution in April's CPIH figure from 'Electricity, gas and other fuels', suggesting a weighting of 4%. One has to dig into the ONS archives to see the last basket of goods used for RPI, but it does give a better breakdown. 'Fuel and light' made up 4% of the basket in 2010 and has varied between 3-5% between 1992-2010. So there doesn't appear to be much difference - both are less than the 5-15% you suggest. The documents detailing updates to the baskets, while devoid of detail, do state that they cover "Consumer Prices Index including owner occupiers’ housing costs (CPIH) and Consumer Prices Index (CPI). It also covers our legacy measure, the Retail Prices Index (RPI). The same changes have been made to the baskets used for all three measures."

Between the April and October energy price rises, it is going to increase its weighting in the basket of its own accord, but it does seem to have started out quite low.

Stargunner

Where is Type_45 with his regular market update?

Oh yes, I forgot that he only posts on Red days.

masonic

Stargunner said:

Where is Type_45 with his regular market update?

Oh yes, I forgot that he only posts on Red days.

After a 0.75% fed rate hike, with the promise of another one next month. Not quite the reaction I expected.

Stargunner

masonic said:

After a 0.75% fed rate hike, with the promise of another one next month. Not quite the reaction I expected.

Markets like the fed being hawkish to try to curb inflation 

pedrodelgado

Stargunner said:

masonic said:

After a 0.75% fed rate hike, with the promise of another one next month. Not quite the reaction I expected.

Markets like the fed being hawkish to try to curb inflation 

Be interesting to see if UK markets react in the same way when the BOE raise rates again. 

coastline

Hectic session from 7pm and a rally after the recent sell off . Fed has a new Dot plot with a near 4.5% by the end of next year. Will it get there without damage ?

FVUA-UNXEAcFhgv (900×463) (twimg.com)

10 year yield has rallied from 1.75% since March to 3.5% this week. Today it has eased back to 3.30%. Market has held up well considering the rapid move. SP 500 was 4150 in March and now still holding recent lows of 3800. Not a disaster .

United States Government Bond 10Y - 2022 Data - 1912-2021 Historical - 2023 Forecast (tradingeconomics.com)

SP 500 daily timeframe oversold on the Stochastic so room to go up ? 

$SPX | SharpCharts | StockCharts.com

Now they'll focus on Q2 earnings until the next round of inflation and FED moves. Starting to think it'll be earnings driven soon as the rate rises are being absorbed. Early days.

It'd be hard to watch anything more closely than we watch consumer spending, says Jerome Powell - YouTube

We'll be determined and resolved but flexible in policy, says Jerome Powell - YouTube

InvesterJones

lozzy1965 said:

Zola. said:

Who's interested in the FTSE 100?  

Me   Well at least a little bit.  And it's up 1.31% as I type!  Using some of the logic in this thread that is probably the start of a bull run!

NASDAQ 100 finished up 2.49%!

masonic

Stargunner said:

masonic said:

After a 0.75% fed rate hike, with the promise of another one next month. Not quite the reaction I expected.

Markets like the fed being hawkish to try to curb inflation 

The counter-argument, which has been trotted out several times to explain markets falling when the fed was being hawkish was that it threatens the future returns from 'jam tomorrow' tech stocks on high earnings multiples, both due to higher borrowing costs and reduced demand for discretionary goods and services. The fleeting dovish stance taken by the fed a few weeks ago was also used to explain the short rally experienced immediately after the comments were made.

GazzaBloom

InvesterJones said:

lozzy1965 said:

Zola. said:

Who's interested in the FTSE 100?  

Me   Well at least a little bit.  And it's up 1.31% as I type!  Using some of the logic in this thread that is probably the start of a bull run!

NASDAQ 100 finished up 2.49%!

NASDAQ Pre-market today is -2.73% and S&P500 -2.23% giving up all of yesterdays gains

I guess there may be another 10-20% drop to go until we can think about a bottom. We may see complete capitulation and despair before the dawn breaks

masonic

Interesting that the MPC is already beginning to fear the impact its rises are having on the economy.