Inflation Anticipation, Breaking Down Climbing Treasury Yields, and Gold’s “Death Cross”
February 17, 2021 | FIRESIDE CHARTS
Inflation expectations are climbing in the U.S., aided by the current deep freeze in Texas which is straining energy infrastructure and pushing oil prices higher. But inflation indicators aren’t just limited to the energy sector. Investors’ interest in value stocks has continued meanwhile in what could be another nod toward approaching inflation. Could a true bond route be on the horizon too? Gold at least is under pressure from climbing rates and a risk-on environment. Does the emerging “death cross”—a common indicator of an approaching bear market—spell trouble ahead?
1. Energy inflation keeps creeping higher, the latest price-spike spike caused by cold weather and supply shutdowns in Texas. On Monday it was 10 degrees colder in Austin than in Boston…
Source: The Daily Shot, from 2/16/21
2. The current deep freeze in Texas has cut 3 times more production than any recent hurricane (smaller spikes down)…
Source: The Daily Shot, from 2/16/21
3. Signs of inflation in goods continue. Below is the NY Fed’s regional survey. 2021 shows an acceleration of prices paid vs. prices received. Will margins get squeezed, retail prices increase, or some of both?
Source: The Daily Shot, from 2/17/21
4. As the crisis drags on, let’s not forget the 10 million+ Americans who have lost their job and are still out of work…
Source: Statista, from 2/15/21
5. To prevent a systemic issue from forming, the latest stimulus needs to focus. The chain: loss of job, can’t pay rent, landlord can’t pay mortgage, and then lenders are overwhelmed by the sheer number of defaults…
Source: The Daily Shot, from 2/16/21
6. Three new all-time highs on Friday…
Source: The Chart Store, as of 2/12/21
7. We’ve heard this tune before…
Source: The Daily Shot, from 2/16/21
8. Is the renewed interest in value stocks more of a play on sectors (commodities, real property) that historically do well in times of inflation?
Source: The Daily Shot, from 2/17/21
9. More evidence the stimulus package should be targeted to ONLY those in real need:
Source: The Daily Shot, from 2/15/21
10. Another all-time high…
Source: The Chart Store, from 2/14/21
11. If rising rates on the long-end of the curve continue, many bonds will have some losses…
Source: The Chart Store, from 2/14/21
12. Will bond losses turn into a bond rout? Or will the Fed’s QE charge to the rescue?
Source: The Daily Shot, from 2/17/21
13. Rising interest rates and a risk-on environment is putting pressure on gold. Will the “death cross” hold or reverse?
Source: The Daily Shot, from 2/17/21
14. Like the S&P 500, EM earnings have fully recovered from Covid:
Source: The Daily Shot, from 2/16/21
15. It has taken over 30 years, but the Nikkei is back!
Source: The Daily Shot, from 2/15/21
Disclosure: The charts and infographics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are they a recommendation to take any action. Individual securities mentioned may be held in client accounts. Past performance is no guarantee of future results.