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Inflation adjusted the bear market of 1973 took until 1982 to recover, that's 10 years In addition to all the prices inflating people did not have jobs. I hope it does not get that bad.
I can only read about them....I was too small to know.
Nixon dropped the facade that the US dollar was still able to be tied to gold. Some of that inflation was backed up and the dollar was allowed to depreciate. The Hunt Brothers owned up to 2/3 of all silver before going bust.....after a similar row had gone into soybeans. Oil prices soared as OPEC embargoed the US because....well, Iran could have gone better. The 70's saw the last of the US trade surplus....though GNP was positive for a bit longer. I heard people in the 70's that worked year-round could pay for their college.
What are the headwinds now?
While the 70's were a series of shocks....the economy now is simply a harvest of rot and decay. Anything actually still produced in the US may still be of quality, but inflation has gone unchecked for quite some time (education, health care, construction costs). We may have a giant Navy, but we don't produce our own merchant fleet anymore. Railroads are extremely slow and expensive to build. Even aircraft are getting caught by more and more competition. As fast as the Fed pushes gargatuam amounts of money into the economy....it leaks out just as fast through trade. The Fed's brought in a tiny fraction of their stimulas released....and the economy has now contracted for 6 months. (Didn't we used to call that something?)
Still, if the Fed is done raising rates, that will be a boom for equities. Inflation is actually kind to equities....it's the interest rate volatility that drives them down. The dollar is very strong at the moment, once that weakens, then your gold trade will be in play.
Or they raise too much here and put the world in recession. Then we'll all be playing Japan's game....only we won't have a surplus to start with.
Next week brings the July CPI and PPI updates. It feels like a lot of this data may already be anticipated/baked in; however, the significant employment print today came as a surprise to the upside, so we'll see what happens soon enough!
Yeah, but that's YOY. I think the more important number is 0.00%, which was the increase (or lack thereof) from June to July of this year. In fact, CPI-W was actually negative, having fallen .11% month over month.
You're conflating the YoY increase, which I indicated, with the month-to-month decrease from June.
Inflation has started to abate from the June CPI report. The CPI report breaks down many items, and again, it's a mixed bag with many items moving up from June. But all in, July's numbers have moved down from June. Progress!
Yeah, but that's YOY. I think the more important number is 0.00%, which was the increase (or lack thereof) from June to July of this year. In fact, CPI-W was actually negative, having fallen .11% month over month.
While inflation is up YoY, I mentioned that MtM inflation has abated.
The Nasdaq Composite is officially in a new bull market.
The technology-focused index rose 2.9% Wednesday, reflecting a rise of more than 20% from its low in mid-June. It climbed with other major indexes after a softer-than-expected inflation reading raised investor hopes that the Federal Reserve may soon moderate the pace of its campaign of interest-rate increases.
The recent rise in the Nasdaq ended its longest bear market since 2008 in the depths of the financial crisis. It is still down 18% this year and was off 32% at its low on June 16. - Goldfarb, S. (2022, August 11). Tech-Led Nasdaq Enters Bull Market. Wall Street Journal, A1
The Nasdaq Composite is officially in a new bull market.
The technology-focused index rose 2.9% Wednesday, reflecting a rise of more than 20% from its low in mid-June. It climbed with other major indexes after a softer-than-expected inflation reading raised investor hopes that the Federal Reserve may soon moderate the pace of its campaign of interest-rate increases.
The recent rise in the Nasdaq ended its longest bear market since 2008 in the depths of the financial crisis. It is still down 18% this year and was off 32% at its low on June 16. - Goldfarb, S. (2022, August 11). Tech-Led Nasdaq Enters Bull Market. Wall Street Journal, A1
Beware if this is just a bear market rally. Yes, up 20% from the mid-June low. All we need to see is some missed earning reports next quarter. Fear of recession comes in. Lack of growth in labor markets. We will see if inflation was one month blip or what.
Chances are market will retest the lows to make a true bottom. If it just goes down 10% would be enough.
The Nasdaq Composite is officially in a new bull market.
The technology-focused index rose 2.9% Wednesday, reflecting a rise of more than 20% from its low in mid-June. It climbed with other major indexes after a softer-than-expected inflation reading raised investor hopes that the Federal Reserve may soon moderate the pace of its campaign of interest-rate increases.
The recent rise in the Nasdaq ended its longest bear market since 2008 in the depths of the financial crisis. It is still down 18% this year and was off 32% at its low on June 16. - Goldfarb, S. (2022, August 11). Tech-Led Nasdaq Enters Bull Market. Wall Street Journal, A1
It's still so far down for the year, my mind cannot even think "bull market" yet. Not there, for me.
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In addition to all the prices inflating people did not have jobs. I hope it does not get that bad.
