CPI shock upsets markets
First published September 14, 2022 at thepatientinvestor.com. Excerpt published with permission.
The consumer price index (CPI) dipped to 8.25% (seasonally adjusted) for the 12 months to August but disappointed stock and bond markets who were anticipating a sharp fall.
The S&P 500 fell 4.3% to test support at 3900. Follow-through below 3650 would confirm earlier bear market signals.
Services CPI -- which has minimal exposure to producer prices and supply chains -- climbed to 6.08%. Rising services costs indicate that inflation is growing embedded in the economy.
Fueled by strong growth in average hourly earnings.
But it is not only services that present a problem...
Quote for the Week
"Rule #2: Excesses in one direction will lead to an excess in the other direction..."
~ Bob Farrell's 10 rules for investing
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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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