It seems to me that overvalued stocks are going to have big sell-off sooner than later. Time to stay with hidden gems and quality stocks with attractive valuation.
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Fed’s Powell: Elevated inflation will likely delay rate cuts this year
https://apnews.com/article/inflation...487fdb98395d09
wonder if we will get same reaction from ORR after today's CPI ?
The Kiwi Bank economist on RNZ this morning pointed out that the double digit increases in rates & insurance is going to keep inflation stubbornly elevated.
Hopefully the RBNZ is smart enough to know these two significant items just suck money out of the economy and will slow the demand for 'things'. They would be smart to ignore these distortions from the core inflation numbers. But are they smart?
On another note, I see the VIX is only marginally higher & is trading around the five year average, so for all the global tension, the VIX is treating it as trading pretty much as usual.
If oil prices hit above $100 as a result of geo politics many industries will hit and inflation will go up further. Consumer purchasing power will drop further. Demand for EVs are falling. Cash rich companies will make more cash thanks to high rates. Highly leveraged companies will struggle.
Potentially not good for little old NZ
"WHAT'S HAPPENING WITH DAIRY COWS AND BIRD FLU?"
https://hub.jhu.edu/2024/04/15/qa-avian-flu-in-cows/
https://businessdesk.co.nz/article/p...4897-446239310
https://www.interest.co.nz/economy/1...ted-while-rent
New Zealand's annual inflation rate dropped to 4% in March, from 4.7% in December, albeit rents, house construction costs and council rates continued rising.
The Consumers Price Index (CPI) increased just 0.6% in the March quarter, up from 0.5% in the previous period.
The CPI measures changes in the prices paid by households for goods and services which provides insight into inflationary trends in NZ’s economy.
Statistics NZ said on Wednesday the price increases in the March quarter were the smallest since June 2021.
“However, they remain above the Reserve Bank of New Zealand’s target range of 1% to 3%,” Stats NZ senior manager Nicola Growden said.
Annual inflation still came in higher than what the Reserve Bank (RBNZ) was expecting as the central bank had forecast annual inflation to decrease to 3.8% in the March quarter.
Westpac and Kiwibank economists had cast 4.2% as their expected annual inflation rate, ASB picked 4.1% while ANZ went for 4% and BNZ came lowest at 3.9%.
RBNZ likes the trimmed-mean number
Stats NZ says-
The trimmed-mean measures – which excludes extreme price movements – ranged from 4.4 to 4.6 percent in the 12 months to March 2024 quarter. This indicates that underlying inflation is higher than the 4.0 percent increase in the CPI
Inflation will only die with job losses. And there were more this morning with Oranga Tamariki cutting 400 jobs and just announced now 500 jobs on the line at the ministry of education.
My local thai restaurant closed last month too.
Its tough out there imo
The sharks are back in today?
Exactly, rent, rates, insurance and construction costs. Landlords are not going to drop the rent even given interest deductibility. Rates (and water, etc) are going up to pay for the debt and road cones. Building materials are sticky, thought hopefully (as we are pricing a renovation) the builders margins will get squeezed due to competition for work.
Every time it feels its different but its always the same ...Inflation will come down so will rates ...how it happens ...like it happened before ...cycle after cycle ...thats why its called cyclical ....:D
From what I am seeing is that the cost of building is / has come down substantially and I wouldn't be surprised to see that continue as work dries up. That combined with Government efforts to strip away red tape & allowing a lot more products to be accepted in NZ.
Speaking to someone today who is a commercial landlord with multiple properties and they have offered their tenants a reduction in lease costs, recognizing the difficulties business owners are facing. Not sure if that is wide spread, but I thought it was interesting.
Every day NZX bluechips open weak and close strong ...I hope traders like Bull taking advantage of fickle minded retail investors of NZ who follow. the overseas sentiment by selling at open only to see blue chips improving mostly by close
Inflation is not going to end easily. I don’t see falling prices for Insurance premium, rents, and rates. They have gone up in huge amount.
https://nz.news.yahoo.com/why-interest-rate-cut-may-075100884.html
"The headline Consumer Prices Index (CPI) measure fell from 3.4% in February to 3.2% and the 'core' measure, which strips out volatile elements such as energy, food, alcohol and tobacco, eased from 4.5% in February to 4.2%.
However, both figures are higher than expected, with the market having looked for CPI of 3.1% in March and core inflation of 4.2%. To that extent, the figures are a disappointment.
That caveat is important because there is still inflation in the system.
The March CPI figure in the United States came in at 3.5% - up from 3.2% in February and the third consecutive month that inflation had come in ahead of expectations. The American experience is a reminder, should one be needed, that inflation does not come down in a straight line.
The Bank's most recent Financial Stability Report, published just before Christmas, noted that some five million UK households who locked into their mortgage deals before it began raising the cost of borrowing would feel the impact of higher mortgage costs between then and the start of 2026."
I find it interesting that the NASDAQ seems to be more interest rate sensitive than the DOW. Yet most tech companies use equity rather than debt for finance & the big end of town are sitting on 10s of billions of cash each.