Thursday, July 14, 2016

PPI Can Predict CPI Friday Which Is A Stock Market Risk, Good For Gold

See Full Report
The Fed may be behind the inflation curve.
PPI came out very strong and can predict CPI which comes out Friday.
CPI is key tomorrow and we think holds in it stock market risk.
Inflation is not good for stocks and is good for gold.
The market seems to say inflation is a good thing. It is if it has real growth along with it. Real growth (ex-inflation) however has been slowing while inflation continues to pick up. Today's PPI could predict tomorrows CPI which, if it does, would be a problem. It would mean the Fed is now behind the curve and needs more desperately to raise rates. We see that as a material market risk if this occurs.
Here's the PPI number.
PPIAugSepOctNovDecJanFebMarAprMayJunAnnualized
-0.2-0.5-0.20.1-0.10.4-0.3-0.20.20.40.56%

You can see that June's number is a huge number. You can see by the trend that it is not a fluke because the numbers have been steadily building. The annual pace of June's number is 6%. We will show that if the PPI is right that is a big problem for stocks and bonds.
Let's see if PPI has any predictive value to tomorrow's CPI number.
Let's line up PPI and CPI to see if they are related in any way.
JunJulAugSeptOctNovDecJanFebMarAprMayJun
CPI Topline0.20.10-0.10.20.1-0.10-0.20.10.40.2
PPI0.30.1-0.2-0.5-0.20.1-0.10.4-0.3-0.20.20.40.5

CPI and PPI have been moving together both dropping (September and February) and picking up together (March, April, May).



Chaim Siegel has been working with hedge funds and mutual funds as an analyst and PM his entire career. Chaim specializes in earnings and predicts, analyzes and reacts to earnings and earnings events as well as developing current company stories with a hedge fund perspective. If you want his analysis real time sign up to the right for real time email alerts. #in, $spy, $qqq, $iwm, $vxx, $ycs, $fxe, $EUO, $YCS, ^GSPC, INDEXSP:.INX, #elazaradvisorsllc, CME Globex: ES Disclosure: These trades can lose you money and principal especially when using leverage BY USING THIS SITE YOU AGREE TO TAKE ALL RESPONSIBILITY FOR YOUR OUTCOMES AND LOSSES AND HOLD BESTIDEAS, ITS CONTRIBUTORS AND ELAZAR ADVISORS, LLC HARMLESS

No comments:

Post a Comment

Comment here: