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Inflation: Making the Complex Simple [4/8/21]

Release Date: 04/08/2021

4-15-24 Cracks Appear in the Market's Bullish Armor

The Real Investment Show Podcast

Tax Day woes and audit fears; earnings season commences; What are companies saying? No corporate buybacks, removing major buyers of assets; pay attention to companies' guidance. Markets last week failed at 20-DMA, and tested 50-DMA as momentum slowed. Is not the time to sell? Use any bounce to rebalance risk, but avoid any knee-jerk reactions. Could this be a "buy-the-dip moment?" Lance's favorite bowl is like the market: There's a hairline crack. Inflation has been stickier, and higher-for-longer interest rates have been too high for too long. Preview: Tuesday's article on the Reflation...

4-15-24 Is Now the Time to Sell?

The Real Investment Show Podcast

Markets last week failed at the 20-DMA, and began to test the 50-DMA as momentum began to slow. The narrow trend channel had begun weakening, and the break in the 20-DMA was the first crack to appear in the market's bullishness. The question now is: Do you Sell? By the time markets have confirmed a sell signal, they're already oversold. Don't forget that we're still in the seasonally strong period of the year, and we're moving into what is likely to be a fairly good earnings season. So don't over-react; use whatever rally we get today or tomorrow to rebalance risk in your portfolio. Move...

4-12-24 How to Deal with Financial Stress

The Real Investment Show Podcast

CFP testing results & commentary on professional credentialling; the importance of the Health/Wealth connection; the importance of continuing education (CE); a brief history of JP Morgan and "too big to fail." Inflation is permatory, not transitory. Profit margins are not great because costs are up. Jerome Powell is trying to put out a fire with a water pistol; how many ate cuts now? There is still too much money in the system to really tame inflation. Real Wages have peaked: Is this Jerome Powell's "Volker Moment?" What clients "think" about portfolios is the toughest thing for advisors...

4-11-24 Is Inflation Too Hot to Handle?

The Real Investment Show Podcast

CPI Inflation clocks in hotter than expected, with more data to come; car insurance inflation is an out-of-the-blue surprise (unless you recently renewed your policy!) What does the Fed do next? Markets are pricing-in NO rate cuts in June...and maybe not at all this year. Markets trace the 20-DMA, building a rounded top as momentum slows; beginning to confirm a take-down of the 20-DMA. Economic growth is slowing; insurance inflation spike "smells like" an adjustment; it's a lagging indicator. Homeowners equivalent rent is also a lagging indicator. It's not a question of if, but when inflation...

4-11-24 Will Markets Break the Trendline?

The Real Investment Show Podcast

Last year's market rally amid the AI chase and hopefulness for Fed rate cuts tracked right along a narrow channel around the 20-DMA. Then came Summer, and a market correction that hit in October. Markets formed a rounded top during that action, which is what we're beginning to see currently. Markets have operated similarly in a defined range along the 20-DMA and are now developing another rounded-top as the market starts to lose momentum. Theoretically, markets could take out last Thursday's low today...a process that is beginning to confirm a break in the trendline that goes all the way back...

4-10-24 Can Social Security Be Saved?

The Real Investment Show Podcast

It's CPI Day (with m/m inflation clocking in with a .4% increase, and a y/y gain to 3.8%, hotter than expected). Sheila Jackson-Lee's science experiment; the NFIB Survey does not bode well for small businesses:Sentiment falls to a new low based on poor sales. There remains a dichotomy between headline economic news and what's happening behind the scenes. Markets break below the 20-DMA, but regain support. Why what really matters is the data the Fed looks at. Portfolio Spring Cleaning; Five or six ways to save Social Security (but first, a history of SS); the mathematical realities. Why...

4-10-24 Markets Hang Onto Support...barely

The Real Investment Show Podcast

Markets continue to hang onto support at the 20-DMA by its fingertips. Expectations are for a .3% increase in inflation last month. (There's a mini-scandal swirling over the BLS releasing the data early to a few select banks.) [This report was recorded before the release of inflation numbers, up .3% m/m and up 3.8% y/y.] The change in calculating rent inflation raises the question of whether we're measuring the data or just manipulating it. A weak print will put us back on track of the 20-DMA trendline; a hot print could break support, pushing us towards the 50-DMA. If we get something close...

4-9-24 Margin Debt Surges as Bulls Leverage Bets

The Real Investment Show Podcast

Some are disappointed the eclipse did not herald the Rapture; markets are holding firm at 20-DMA. NFIB preview vs CEO Confidence; why small business' mood matters. Interest Rates in different states; no change in bullish market trend (why not to knee-jerk react to market); but trend weakness is become more apparent. Consumer confidence vs Valuation (w/charts); why margin debt is like dynamite. Correction is coming, and will feel worse due to greed. The cost of margin debt as rates rise. Earnings Season preview: Are Regional Banks in trouble? Q1 guidance has been lower: What happens if interest...

4-9-24 Is the Bullish Trend Weakening?

The Real Investment Show Podcast

Our advice to NOT have a knee-jerk reaction to last Thursday's markets dip below the 20-DMA was well founded, as markets were able to hold on to that support. As of this moment, last week's break in the 20-DMA has been negated: There has been no change in the markets' bullish trend. A key clue may be a decline in price momentum, however. What we need to watch for now is a close this week below the 20-DMA, which would confirm this weakness. Hosted by RIA Chief Investment Strategist, Lance Roberts, CIO Produced by Brent Clanton, Executive Producer ------- Watch the video version of this...

Is the Inflation Scare Overblown? (4/8/24)

The Real Investment Show Podcast

Eclipse-mania is out of control. Fed speakers confirm they'll cut rates, but in no rush to do so. Jobs numbers tantalize markets; the impact of immigration on employment. Boomers & Gen-Z plans to splurge on groceries in 2024. Markets takeout the 20-DMA; will the break be confirmed this week? Putting Inflation into proper perspective; the three measures of inflation. The economic basics of Supply & Demand (and their impact on inflation). Your personal inflation is not the same as mine. What markets pay attention to (CPI). How to fix the power grid: Productive vs un-productive debt....

More Episodes

This is a companion segment to the article(s) written by Michael Lebowitz (see link below); despite what the government wonks tell us about "no inflation," a quick visit to the grocery store or the gas station refutes that narrative. The real source of inflation is the devaluation of the Dollar, which requires more money to purchase goods. What what happens when money takes on an "expiration date," as the Chinese are considering imposing on their digital Yuan?

- Chief Investment Strategist Lance Roberts w Portfolio Manager, Michael Lebowitz, CFA
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Articles Mentioned in this show: https://realinvestmentadvice.com/inflation-making-the-complex-simple-part-1/
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