PPI Serves as a Warning for CPI, A Look at Rates after Fed Meeting, and Omicron Eclipses Delta Variant
December 16, 2021 | FIRESIDE CHARTS
The latest on the Fed and inflation…what is driving their decisions? A great historical look on why equities, despite their risks, belong in a portfolio. Just why is/was Tesla valued at more than every other car manufacturer in the world…combined? U.S. opioid deaths, thanks to legal prescriptions, are the real front on any “war on drugs”. And finally, a chart showing how virulent and dominant Omicron is. Today, scientists reported that Omicron replicates 70 times faster in our nasal passages than the Delta variant. Please stay safe this holiday season!
1. U.S. producer inflation continues to skyrocket. These costs will filter through to CPI…
Source: TheDailyShot from 12/16/21
2. The Fed held steady on rates but will double the pace of QE reduction starting in January. Stocks seemed to love the stance and the bond markets don’t seem to really believe the rhetoric. Short term inflation expectations did rise despite the 2- and 10-year treasury yields actually declining on the day.
Source: TheDailyShot from 12/15/21
3. A great chart showing the S&P 500’s long term growth channel. Note we are near the top:
Source: Deutsche Bank Research
4. I’ve been looking for a chart like this. Tesla has recently declined in price due to Elon Musk’s sale of ~$13 billion in Tesla stock. Yes, he has exercised additional stock options, but is he truly bailing out? All this aside, Tesla, before the latest pullback, was valued at more than every other car manufacturer in the world—combined. Yet they only make 15% of the world’s EVs…
Source: The Washington Post
5. Utilities have been responding to private solar systems by jacking up the delivery costs. Yet the electricity generated at a home is passed to the neighbors (electricity flows similar to water) and utilities count the whole grid. As electric cars and heat exchangers gain popularity, the higher demand will enrich utility shareholders through this “shift” in costs.
Source: @TheOneDave
6. Does our war on drugs include legal prescriptions? When is enough, enough?
Source: TheDailyShot from 12/16/21
7. Just like Delta took over from the other variants, Omicron is clearly the dominant strain. It was first discovered in South Africa so this pattern should repeat worldwide. Early indications are that the vaccine helps lessen severe disease, but the booster is needed to be deemed “fully” vaccinated against Omicron.
Source: TheDailyShot from 12/15/21
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.