Stocks End Lower As High Inflation Persists Image: Bigstock Stocks closed lower again yesterday after another failed rebound attempt. Yesterday's CPI report showed inflation rose 0.3% m/m and 8.3% y/y. That was less than the 0.2% and 8.1% that was expected. But the y/y change still showed inflation at roughly 40-year highs. (For the record, ex-Food & Energy, it was up 0.6% m/m vs. the consensus for 0.4%, and 6.2% y/y vs. the consensus for 6.0%.) Stocks opened lower on the news, but almost immediately started climbing higher. The Dow and the S&P hit their highs of the day mid-morning, and stayed in the green until a little after noon. The Nasdaq marked a little bit of time in the green, but fell back into the red well before the others did. They all, however, hit their worst levels going into the close. While the inflation news wasn't new per se' (we've been at 40-year highs for months), it just confirmed (again), that inflation is not going to go away without a fight. But also weighing on stocks was the continued fall in crypto currencies. There's a lot of money tied up in cryptos. And you can be sure as its value plunges, many are likely having to raise cash elsewhere to weather the storm. In other news, the Atlanta Fed Business Inflation expectations dipped a bit from 3.8% to 3.7% on a y/y basis. That's not much. But it was a dip nonetheless. And MBA Mortgage Applications rose 2.0% with the purchase index up 4.5% and refi's down -2.0%. Today we'll get Weekly Jobless Claims, the PPI-Final Demand Report, and the EIA Natural Gas Report. And more earnings. In the meantime, don't let the current weakness in the market get to you. The economy is in much better shape than the market is giving it credit for. It can be hard to watch the market go down, that's for sure. But the quickest way to ruin one's portfolio is to make emotional decisions. Be sure to sell your laggards. And don't shy away from picking up new stocks at great prices. But getting out of everything to 'make the pain stop' is rarely a good move. And swearing off stocks for the future will only cost you a fortune in missed opportunities. A simple plan that has proven to work in both up markets and down is all you need. And it's easier than you think. To learn more about how to avoid the biggest threat to your investments, and how to take advantage of the current market situation, be sure to read our latest commentary... The Single Worst Threat to Your Stock Portfolio Best, Kevin Matras Executive Vice President, Zacks Investment Research |
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