Life Gets More Expensive, A Milestone for Corporate Pensions, and Inflation Ticks Up in Asia
June 11, 2021 | FIRESIDE CHARTS
CPI is in, and climbing fast. Driven largely by airfare, household furnishings, and used cars, prices are up 5% annually—the fastest annual rate since 2008. But as the Fed would likely remind us, it’s all relative, and we’re seeing that new attitude in action. Meanwhile, after a year of record performance from equities, corporate pensions are approaching a milestone they haven’t seen in over a decade. Big tech hasn’t been pulling quite as much weight as we’re used to though after a remarkable rotation to value stocks—are the biggest names in the S&P 500® Index poised to struggle further as the recovery rolls on? Yesterday’s hotter-than-expected CPI print brought bond yields lower to 1.44%, and as equities hit new highs in Europe and inflationary pressures tick up in Asia, could commodity prices finally start to moderate?
1. CPI growth was robust for the third month in a row. The Fed wanted it above trend to make up for the lower readings last year and they have been successful. Careful what you wish for!
Source: The Daily Shot, from 6/11/21
2. Great news for all!
Source: Bloomberg, from 6/10/21
3. Did the pandemic break the back of the Tech/internet decade-long rally?
Source: The Daily Shot, from 6/10/21
4. Higher than expected CPI news moves bond yields lower?! Did the Fed buy a lot of bonds yesterday?
Source: The Daily Shot, from 6/11/21
5. The Fed’s premise is that the inflation is “transitory” as the commodity price spikes are not likely to last. Lumber has already seen significant price moderation, are the metals next?
Source: The Daily Shot, from 6/10/21
6. Here is lumber’s price chart:
Source: The Daily Shot, from 6/10/21
7. Europe’s stock markets, on average, are hitting new highs. Another statistic showing Europe is just a few months behind the U.S. in its recovery:
Source: S&P Global Market Intelligence, from 6/10/21
8. Most Asian EM economies are also seeing resurgent inflationary pressures. Higher prices in China, Japan and Asian EM’s can be imported!
Source: The Daily Shot, from 6/10/21
9. Japan’s economy is also seeing pressure on PPI:
Source: The Daily Shot, from 6/10/21
10. Japan seems to have their fourth wave under control…good news for the Olympics?
Source: JHU CSSE, as of 6/11/21
11. “I read it on the internet so it must be true”. We get tweets of breaking news, but with the amount of fake/biased news online, this still surprises us. “OK, Boomer”…
Source: The Daily Shot, from 6/11/21
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.