Inflation may not be dead

By Colin Twiggs
October 13, 2017 8:30 p.m. EDT (11:30 a.m. AEST)

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September consumer price index (CPI) spiked up to 2.2% but core CPI (excluding food and energy) hardly budged at 1.9%.

CPI and Core CPI

The producer price index (PPI) climbed to 4.1%.


Hourly wage rates have ticked up above 2.5% for production and non-supervisory employees; 2.8% for total private sector.

Hourly Wage Rates

If this flows through to core CPI we are likely to see a more hawkish stance from the Fed.

In the mean time, the S&P 500 is making new highs while a Twiggs Money Flow trough above zero indicates strong buying pressure. Immediate target for the advance is 2600*.

S&P 500

* Target calculation: 2500 + ( 2500 - 2400 ) = 2600

The Nasdaq 100 broke resistance at 6000, confirming the broad advance.

Nasdaq 100

The small-cap Russell 2000 is also making new highs, having recently reached 15.

Russell 2000

The market is advancing on a broad front.

You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.

~ Warren Buffett


Colin Twiggs is director of The Patient Investor Pty Ltd, an Authorised Representative (no. 1256439) of MoneySherpa Pty Limited which holds Australian Financial Services Licence No. 451289.

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