We’ve been reassured by our Federal Reserve Chairman, the recent data pointing to higher inflation will be “transitory”. The market is believing Chairman Powell, at last for now!
Last week our Consumer Price Index was up 2.6% year over year, the highest in some time. Retail sales for March were up 9.8%, above the consensus guess of 5.6%. The price of Gasoline is rising, no surprise. Housing prices, you just have to say wow! Initial Weekly Jobless claims last week fell to a pandemic-level low.
None of the increasing economic data should be a surprise. Stimulus, warm weather, etc. The traffic is pretty much back to normal.
What proof do we have, the market is believing Chairman Powell? The 10 Year US Treasury yield dropped from a recent high of 1.75%, to close last week yielding 1.57%. If the market believed inflation was truly taking a strong hold, the yield would be increasing.
We have not had to deal with above average inflation for many years. Do you believe in “reversion to the mean??”
Markets Higher, How Much Higher?
The Small Cap Stock Index was the only major stock index to increase less than 1% for the week with a rise of .86%. All other indexes rose between 1.10% and 1.67%. More and more money is entering the market weekly, continuing to push the indexes further into record territory.
Everyone loves seeing the value of their portfolio increase, no matter how they feel about the economy, politics, etc. Me included.
I’m asked frequently, how much higher will the market rise, before a true longer standing correction?
As I certainly do not have an answer, I do believe economic and market cycles continually go from trough to peak, trough to peak, repeatedly. The length of time between directions is the challenge. The markets typically go up much higher than most believe reasonable, and also fall much lower than expected.
For now, let’s enjoy the ride. But PAY ATTENTION!
Identity Theft/SS Webinars
This is a reminder that we are hosting the Identity Theft/Cyber Crime webinar tomorrow (Tuesday, April 20th) at 10:30am. It’s not too late! If you have not registered and would like to do so, please click here.
On Tuesday, April 27th, @ 6:30 pm we’ll be presenting our Social Security Planning Workshop in conjunction with Jefferson Hospital. To register, please click here.