Should you care about CPI

Our experts weigh in

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AUGUST 15, 2024       Hey y’all, Yesterday we had a “good” CPI number.  “Good” meaning that inflation fell below 3.0% for the first time since 2021. Overall, sure, that’s a good thing. Inflation is still high, and people are still feeling the effects. But, in theory, this is a sign that the economy is moving in the right direction. And the markets seemingly have stabilized and calmed down in response. Now, all of that is interesting. But is it really important? I asked our experts to weigh in, and I think you’ll be surprised by their thoughts. Here’s what I asked: “Should people care about the CPI? If yes, why? If no, why not?”  And here are the responses I got…   “Well, shoot no. News and the subcategory ‘economic news’ has no real causation to market moves.   Mainstream media often uses the same headline to explain moves up or down, like ‘CPI is soft’ market moved down in response vs ‘CPI is soft’ so market moved up in response.” True to form, Jeffry is the least “fundamentals” trader I’ve ever met. He is all about the technicals, the market math that lies behind big market moves. So it’s no surprise that he doesn’t think you should care about CPI… But what do our other experts think?    More than HALF of S&P 500 stocks are down over the last two years…   Yet IRM has outpaced the entire S&P 500 by more than 5X the return! (without even counting dividends) Get 6 more killer dividend stocks just like this — Click now! “Yeah that is kind of how I explain it to people when it comes to most of those events,” Nate said, referring back to Jeffry’s comments. “They're basically a catalyst for sentiment in my view. If sentiment is very bullish, they look for reasons to buy from the news. If it's very bearish, they look for reasons to sell the news. “You could make the argument that over the longer term, stitching all the reports together they do represent an overall view of the economy which, of course, impacts the stock market. The problem with that is that the market actually doesn't care about the economy in any meaningfully correlated way AND most of the reports (like inflation) are not true representations of reality anyway. I guess that leaves me at: You should be aware of them but you probably shouldn't care about them.”  Put that as another tally in the “you shouldn’t care much about them” camp. I think Nate makes a really interesting point here saying “The market actually doesn’t care about the economy in any meaningfully correlated way AND most of the reports (like inflation) are not true representations of reality anyway.”  Big if true! (And it’s probably true…)  “News is a market-moving event at the time of the news, after that, it gets thrown in a trashcan and then the traders move the market in the direction they want.  Agreeing with JT, the media HAS to have a reason the market moves, they can't believe that the market moves on its own merit or is pushed around by traders.”  This is such a balanced and brilliant take. Geof, who is the only real news trader in our group, still realizes that news is just a flash in the pan. It creates a short-term opportunity, but it’s not a long-term concern. And I think the takeaway that the media is driving a narrative that might be completely divorced from what really moves the market is so important. “I told people in the room today to take it with a grain of salt. We definitely have seen things like CPI, GDP etc create multi-day spurts in the markets - like 72-hour big moves when there's something really positive or negative.  But there's always another ‘big report’ right around the corner - like 2-3 a week. It’s funny to see how much less volatility there is even around Fed meetings now than 2 years ago.” So it seems like everyone agrees:  Our guys realize that news can move the market temporarily, but it’s only a sugar high. Real market change happens over time and because of forces that the media doesn’t talk about.  Hope this has been a helpful look into the CPI number and whether or not it’s important. Have a good one, Stephen

AUGUST 15, 2024 Hey y’all,   Yesterday we had a “good” CPI number.    “Good” meaning that inflation fell below 3.0% for the first time since 2021. Overall, sure, that’s a good thing.   Inflation is still high, and people are still feeling the effects. But, in theory, this is a sign that the economy is moving in the right direction.   And the markets seemingly have stabilized and calmed down in response.   Now, all of that is interesting. But is it really important? I asked our experts to weigh in, and I think you’ll be surprised by their thoughts.   Here’s what I asked: “Should people care about the CPI? If yes, why? If no, why not?”    And here are the responses I got…   “Well, shoot no. News and the subcategory ‘economic news’ has no real causation to market moves.     Mainstream media often uses the same headline to explain moves up or down, like ‘CPI is soft’ market moved down in response vs ‘CPI is soft’ so market moved up in response.”   True to form, Jeffry is the least “fundamentals” trader I’ve ever met. He is all about the technicals, the market math that lies behind big market moves. So it’s no surprise that he doesn’t think you should care about CPI…   But what do our other experts think?    More than HALF of S&P 500 stocks are down over the last two years…   Yet IRM has outpaced the entire S&P 500 by more than 5X the return! (without even counting dividends)   Get 6 more killer dividend stocks just like this — Click now! “Yeah that is kind of how I explain it to people when it comes to most of those events,” Nate said, referring back to Jeffry’s comments.   “They're basically a catalyst for sentiment in my view. If sentiment is very bullish, they look for reasons to buy from the news. If it's very bearish, they look for reasons to sell the news.   “You could make the argument that over the longer term, stitching all the reports together they do represent an overall view of the economy which, of course, impacts the stock market. The problem with that is that the market actually doesn't care about the economy in any meaningfully correlated way AND most of the reports (like inflation) are not true representations of reality anyway.   I guess that leaves me at: You should be aware of them but you probably shouldn't care about them.”    Put that as another tally in the “you shouldn’t care much about them” camp.   I think Nate makes a really interesting point here saying “The market actually doesn’t care about the economy in any meaningfully correlated way AND most of the reports (like inflation) are not true representations of reality anyway.”    Big if true! (And it’s probably true…)  “News is a market-moving event at the time of the news, after that, it gets thrown in a trashcan and then the traders move the market in the direction they want.  Agreeing with JT, the media HAS to have a reason the market moves, they can't believe that the market moves on its own merit or is pushed around by traders.”    This is such a balanced and brilliant take. Geof, who is the only real news trader in our group, still realizes that news is just a flash in the pan.   It creates a short-term opportunity, but it’s not a long-term concern.   And I think the takeaway that the media is driving a narrative that might be completely divorced from what really moves the market is so important. “I told people in the room today to take it with a grain of salt. We definitely have seen things like CPI, GDP etc create multi-day spurts in the markets - like 72-hour big moves when there's something really positive or negative.    But there's always another ‘big report’ right around the corner - like 2-3 a week. It’s funny to see how much less volatility there is even around Fed meetings now than 2 years ago.”   So it seems like everyone agrees:  Our guys realize that news can move the market temporarily, but it’s only a sugar high. Real market change happens over time and because of forces that the media doesn’t talk about.    Hope this has been a helpful look into the CPI number and whether or not it’s important.   Have a good one,   Stephen

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ABOUT US:  We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. Prosperity Pub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from Prosperity Pub are for your informational purposes only. Neither Prosperity Pub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. Prosperity Pub is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions.  Please visit https://prosperitypub.com/terms-conditions/ for our full Terms and Conditions.   Unsubscribe This email was sent to phanxuanhoa60.trade1357@blogger.com by Prosperity Pub 101 Marketside Ave, Suite 404 PMB 318, Ponte Vedra, Florida 32081, United States Prosperity Pub