“The most affectionate creature in the world is a wet dog.” Ambrose Bierce
These are broad areas that have been getting stronger
- Greece
- Homebuilding Companies
- Mexico
- Technology
These are broad areas that have been getting weaker
- Wheat
- Long Term U.S. Treasuries
- Japanese Yen
- Retail
Source: Dorsey Wright and Assoc./Thomson Reuters
(See complete List by clicking here: Monthly Trends)
We have been keeping a close eye on central bank activity, both here and abroad. Like we have said before, when inflation rises and stays high, it is our belief that it can create headwinds for both stocks and bonds. Conversely, when we see inflation go down, it can help create the needed tailwinds we tend to appreciate in the investment world.
At the June meeting, the Fed decided to pause (for now) and not raise interest rates. They might have been encouraged to see inflation come out at 4.00%, the day before. This is pretty huge because it was the June 2022 CPI number that took everyone’s breath away, when it hit 9.1%! Europe, however, did decide to raise rates 0.25% at their June meeting. This was appropriate because their inflation is still sitting at 6.1%. This is where we were in February of this year. So, they have a little catching up to do. Both are very encouraging because it is nice to see that inflation number getting better. It is apparent both central banks will not be done until 2% inflation is achieved.
Here's the interesting part with the recent inflation numbers. One of the biggest contributors to inflation going down, is the price of oil; it’s true. One year ago, oil was trading at $120 and today it trades at $70. That’s a decline of over 40%!
These are all encouraging signs for both the economy and investors. I am not sure we are done working through the inflationary issues yet, but we are headed in the right direction. In the meantime, I am keeping an eye out for $3.00 gas. Ah, I just remembered, it is summer….no hopes of seeing $3.00 gas until at least September!
As always, I enjoy interacting with you! Feel free to contact me with any thoughts and questions. You can email or call me…my phone is with me all the time. I look forward to speaking with you soon!
Michael
Michael S. Lewis
President, Wealth Manager
Anchor Wealth Management
358 NW 1st Ave, Suite 2, Canby OR 97013
(503) 910-1687
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Securities and advisory services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC (finra.org/sipc.org)
Sources:
- S. Bureau of Labor Statistics
- EuroStat
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