Making Sense of Conflicting DataThese days investors are faced with a mountain of data and the challenge is to try and make sense out of it and make wise investment decisions.
For what it's worth here are the things I am looking at and how I am interpreting them.
Inflation
Hasn't peaked yet since the PPI is higher than the CPI. That said the seeds are sown for inflation to go down later this year but the decline back to around the Fed target of 2% will likely take about a year.
interest Rates
The Fed is already behind the curve. As long as real interest rates are negative, this is stimulative and will in turn force even higher interest rates which will trigger a recession probably in late Fall or early next year. The current interest rate hikes combined with planned Fed reduction of its balance sheet are already enough to trigger a recession by historical standards
Commodity Prices
Going back over the last 100 years there have been only four times when stock prices fell by over 10% and bond prices also fell by a similar amount. Each time this happened it triggered a rise in commodity prices. This bodes well for the SU SP. The warning is that in recession SPd go down and SU will not be immoto this. This means that there is potential depending on timing for a buy of SU now for a profit and a sell before the recession kicks in and then a reload the depth of the recession