Pre-Market Stocks: Has Inflation Joined Wall Street on Vacation?

It turns out that inflation may be taking a summer vacation, too.

Monday’s survey of consumer expectations showed that expectations for higher prices are easing. Participants in the New York Fed Poll in july We expect inflation to grow at a pace of 6.2% over the next year before declining to 3.2% for the next three years. Those numbers are certainly high, but they are down from the 6.8% and 3.6% projected in the June survey.

Expectations for food and gas prices, which are little controlled by the Federal Reserve, have also fallen.

Consumer psychology affects the economy and we can say ourselves in lower inflation rates. If consumers believe that price pressures are easing, they may rein in their spending and that could become a self-fulfilling prophecy.

Another factor that can help with the inflation crisis: Gas prices have gone up a whopping 60% over the past year, but have been dropping steadily over the past few weeks. The price per gallon is down about 67 cents in the past month, but it’s still 87 cents higher than it was a year ago.

It remains to be seen how these changes will affect the Consumer Price Index, a key inflation gauge, on Wednesday. The CPI rose 1.0% in May and 1.3% in June, pushing the annual inflation rate up to 9%. This is the fastest pace since November 1981.

but modern A drop in gas and food prices could bring down inflation significantly. The monthly rate could drop to 0.2% in July and turn negative in August, according to David Kelly, chief global strategist at JPMorgan Funds. “Overall, as demand slows and supply recovers, we expect to see consistent downward pressure on inflation for the rest of this year and into 2023 even if the Fed follows a somewhat less hawkish path,” he wrote in a note on Monday.

And if that’s not enough inflation news for you, on Thursday we’ll see the latest data from the Producer Price Index, the Fed’s preferred way of measuring inflation. Like the CPI, the PPI has risen over the past few months but analysts generally expect price increases to slow.

However, not everyone agrees.

“It seems that the market is currently expecting it to moderate [economic] Analysts from the BlackRock Investment Institute wrote in a note Monday that deflation will result in lower rates of decline and inflation. “We don’t think such a ‘soft landing’ is likely in a volatile macro system shaped by production constraints. Central banks will have to plunge the economy into a deep recession if they really want to crush inflation today – or live with more inflation. We think they will do the last thing in The end – but they’re not ready to focus yet.”

Fed Governor Michael Bowman said last weekend that she does not believe inflation will fall soon and that interest rates should continue to rise. Mary Daly, president of the Federal Reserve Bank of San Francisco, said something similar, warning that rate increases are not over yet.

And what about all the traffic in the capital? Senate Democrats worked overtime this week to pass a sweeping economic package they called the Inflation Reduction Act. The massive 755-page bill includes $430 billion to fight climate change, increase healthcare coverage, and booR Corporate taxes while reducing the deficit. It’s a good plan for Democrats who will face midterm elections in three months, but will not actually do much to ease inflation in the short term; None of the provisions of the bill will enter into force until 2023.

Bad news for Buffett? Think again.

Warren Buffett’s company lost $44 billion last quarter. This sounds like a lot of money to me, but hey, what do I know?

It just doesn’t really matter, my CNN Business colleague Paul R La Monica reports. In fact, things are looking up for the Oracle of Omaha’s Berkshire Hathaway.

The giant group posted a net loss of nearly $44 billion in the second quarter, mostly due to significant declines in its stock portfolio: Berkshire owns huge amounts of Apple, Bank of America, Coca-Cola, Chevron and American Express.

But Berkshire’s operations are actually pretty strong. The company reported operating profit of $9.3 billion for the quarter, up nearly 40% from a year ago. Berkshire’s business has rebounded from the Covid-induced slowdown in 2020.

Additionally, Buffett is notorious for thinking of market slowdowns as prime buying opportunities. Berkshire has been aggressive this quarter, buying a large stake in oil giant Occidental Petroleum and announcing an $11.6 billion deal for the Ghanaian insurer earlier this year.

Retirement, I came here

Covid-19 has changed the way we measure time. There are real years, and then there are those pandemic years that either flew by breakneck speed or lasted forever, depending on who you ask.

Fortunately, job losses, economic downturn and change over time Those who experienced during the first year of the pandemic did not change the retirement outlook for elderly Americans.

About 60% of the 20,000 participants in the University of Michigan’s 2020 Health and Retirement Study reported that their work was affected by the pandemic, and 55% said they had to stop working completely and 15% lost their jobs permanently. But financial conditions remain remarkably stable. About three-quarters of respondents said their finances were the same, and 60% said their household spending had not changed in 2020.
“The results of this study indicate that the retirement outlook for elderly American adults remains unbroken despite the continuing impact of Covid-19 on their work and financial conditions in 2020,” analysts at the Employee Benefit Research Institute wrote.

See you at shuffleboard stadium.

next one

Earnings from Dine Brands, Hyatt, Spirit Airlines, Coinbase, Roblox and Wynn Resorts.

Coming tomorrow: US Consumer Price Index for July; Earnings from Disney, Fox Corporation, Wendy’s and Bumblebee.

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