Chose the FLT company because the CEO is a friend.
Inflation (cpi) is merely a reflection of what’s happening on the P&L of business.
On the “expenditure” column the 3 largest numbers are usually wages, energy & shipping, often in that order. When the expenditure no.s rise then business must raise prices to offset.
In the past the usual culprit of rising expenditure thus inflation has been wages - this time around that has not been the case - the other 2 have been the driver.
Inflation change is slow, takes a while for increased prices to reach the consumer - oft times the mfctr will absorb some increases then likewise the wholesaler, eventually the retailer - competition is the driver here.
Shipping rates peaked late 21 at just over $10k per container - up from an average of 1.7
The drop has been steady in 22 - by mid June just over 7k - still high nonetheless - finally back to 2k beginning of 23.
Problem is that energy prices went back on the rise mid 23 with wholesale energy stubbornly high - those have begun to fall in recent months.
The key going forward will revert back to wage levels.
For guys following the EURO. I think better days are coming for this currency. If you trade the EUR/USD pair I think now is the perfect time to enter a long trade. Why? For two reasons:
Historically the Euro always tends to finish the year in an uptrend. This is related to the consumer behaviour of the Europeans. As the end of the year approaches, people from Europe tend to spend a lot. Whether it is connected with Christmas shopping or investing their saved money, they spend. This positively affects the economy and the currency.
Another thing is the economic indicators. The last ECB meeting was the first time they didn’t decide to continue with the hike of increasing the interest rate. This is positive news. This means that the inflation is within the frames and knowing that the central banks react slowly, I think the next meeting will have even better news.
Yup. I was talking to a crop importer and she was saying prices are still above pre pandemic levels but def way below 2021 peak. Asking friends in the food industry also and prices have come down but still pretty high like you said. Curious to see what will happen in Q1 2024.
Pretty much like very other affairs on the market. How I see things basically now is this: unless there is a mass extinction black-swan event like covid, there is a very slight change that everything will go lower across the board. Sure, everything is going to have some sort of effect on certain asset classes. But the net effect only will be the fact that the money just has to shift somewhere else. While something is going down, something else is going up somewhere else, you just need to locate that.
Many ‘experts’ were saying yesterday to fade the rise on the Russell 2000 today.
Their reasoning is that when compared with the others the small caps are lagging very far behind.
The failure with this reasoning is to recognize that small caps are lagging because higher int rates affects them most since they are seldom cash rich thus greater need for borrowing.
The rise in stocks yesterday was primarily caused by an expectation that the ground is being laid for an end to rate rises and a fall in same.
That it did back last week, 2 days back it broke it’s most recent daily high and then retreated.
The down candle caused by sellers?
Next day, yesterday, the candle was a green one - no sellers on hand.
Anyways - today has a certain importance - it’s to do with Santa.
Today is the 1st day of the Santa Claus Rally - a 7 trading day period - if stocks rally then that’s seasonal and therefore not a biggie.
It’s when a seasonal trend does NOT happen that ears prick up - so let’s see the next 6 days - today’s close on par for a SCR day - with 1,5 hrs to go that is.
Those 1.5 hrs can be crucial to a whole days trading
Some chatter about military activity re Yemen - full cabinet meeting UK just over - Starmer also briefed.
Could have an effect on risk assets and oil price.
Edit: should add that freight rates have taken a marked increase in recent weeks - if the rise were to continue then could hamper efforts to decrease inflation rates.
Oil rose to just over 75 & then fell back to under 73 - likewise stocks backed off the highs - it’s a weekend - increased geo political risk over weekends is not a time to hold buys.
