Trish: Fed And Markets Ignore Inflation (For Now!)

Investors struggled Thursday to interpret next moves from the Federal Reserve despite repeated assurances from Powell himself that the Fed won’t raise interest rates any time soon.


But, how long can you ignore reality?

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Inflation is here. And, Fed Chairman Jerome Powell was even forced to acknowledge the dismal inflation numbers reported earlier this week.

Consumer prices for the month of June came in up a whopping 5.4%, which means that inflation is not slowing down.

Nonetheless, in testimony on Capitol Hill, Powell reiterated the Fed’s opinion that inflation pressures are “transitory” and that it’s too early to talk about hiking interest rates.

I disagree. This is not transitory inflation and at some point the Fed is going to struggle with a runaway train. Someone will soon need to take a page out of Volker’s book.

Meanwhile, jobs numbers are increasingly improving. Application for unemployment benefits fell to 360,000 last week, from a seasonally adjusted 386,000 the prior week as the labor market heals. This has some Fed watches (including yours truly) thinking that Federal Reserve may have to recognize the improving jobs picture and act on rates. (Heck, there are many reasons the Fed should act on rates.)

But, let’s face it. That’s not happening today. For now, the party lives on and we should anticipate that  investors will continue to reap the rewards as the middle class is increasingly squeezed. (Article continues below.)

Equities

  • S&P 500: 4,361.00, -0.31%
  • Nasdaq: 14,553, -0.62%
  • DOW: 34,940 +0.02%

U.S. Dollar and Treasuries

Treasury yields dropped as Fed chairman Jerome Powell restated his commitment to easy money. The dollar strengthened against a basket of major currencies.

  • U.S. Dollar Index (DXY): 92.51, +0.10%
  • 10-year Treasury yield: 1.348%
  • 2-year Treasury yield: 0.230%

Stocks To Watch

Alterity Therapeutics, a medical company specializing in treatments for neurodegenerative conditions, announced positive results for its ATH434 treatment.

Stocks of Huadi International, a Chinese steel company, surged on retail investor interest.

SHOP.COM, a global e-commerce company, announced its partnership with VERB TECH to launch an interactive video-based sales application. The SHOP LIVE app will be geared both to large retailers as well as small businesses and individuals looking to make a supplemental income.

  • ATHE Alterity Therapeutics $1.59, +14.39%, 3.81M (volume)
  • HUDI Huadi International $6.620, +34.55%, 2.97M (volume)
  • VERB VERB TECH $2.83, +13.65%, 3.65M (volume)

Commodities To Watch

Crude oil prices dropped as Saudi Arabia and UAE reached a compromise on oil supply. The OPEC+ negotiations seem to finally be coming to a conclusion. Gold was stable.

  • WTI crude: $71.90, -1.68%
  • Brent crude: $73.67, -1.46%
  • Gold: $1,821.00, – 0.18%

Crypto

The global crypto market cap decreased by -1.11% in the last 24 hours. The FBI has released an “alert” warning crypto investors about potential scams.

  • BTC: $31,915.93, -1.54%
  • ETH: $1,917.03, -1.24%
  • DOGE: $0.1902, -3.16%
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