Navigating Inflation Concerns and Market Trends
I am writing this newsletter from my favorite city in the USA, San Francisco, where I am meeting with some of our traders this Sunday morning at 9 am for breakfast.
The latest monthly reading on US inflation confirmed expectations for a second consecutive month of a relatively modest increase in the cost of living. The 0.2% rise in both the overall Consumer Price Index (CPI) and the core CPI, which excludes food and energy, in July compared to June, kept inflation hovering not far from 2% when annualizing the monthly data.
Financial markets did not show overwhelming enthusiasm regarding the CPI and today’s PPI. On Wall Street, stocks initially relinquished their early gains and experienced a considerable downturn on Thursday. Meanwhile, the outcome on Friday was characterized by a mixed response to a producer price reading for July that surpassed expectations (as I am writing this). Treasuries were traded lower due to a 30-year bond auction, a reminder of the surge in US government borrowing needs.
Hence, while Wall Street doesn’t believe the Federal Reserve, the US Central Bank, will go for another interest rate hike, they weren’t rushing to conclude that Feds actually lower the rates. It appears that we need to acclimate ourselves to higher interest rates for an extended period.
Are we seeing a recession?
Despite several major banks altering their recession warnings recently, there remains a good number of analysts who remain unconvinced:
Today, Brian and I traded AMD, TSLA, and TQQQ. I reviewed my trades and highlighted remarkable trades by Paras as well. Don’t miss out on my recap.
Peak Capital’s bootcamp is nearly sold out. Registration will be closed on Monday, August 14 at 4 pm. We will have an introductory session on Tuesday, August 15, 4 pm EST in the chatroom where we’ll address any questions you may have about the funded account.
Additionally, we’re excited to extend a 50% discount on our Elite annual membership to all non-members. This membership provides one year of full access to our community at a significantly reduced price. I hope you join us and take advantage of all the community has to offer at this special rate.
I’m looking forward to meeting many of you in SF. If not, I’ll see you in the chatroom on Monday!
To your success,