Inflation Is Still Super Hot

TL;DR

Rising inflation shocks the market, leading to a bloodbath in equities and increased volatility. Debate on whether the Federal Reserve will raise interest rates by 100 basis points at the next meeting.

Transcript

hi everyone and welcome to the real vision daily briefing i'm andreas dino from real vision sending to you live tuesday september 13th after another inflation shocker it's been a day of great volatility in inequities my own portfolio is bleeding but i'm looking forward to debate whether the federal reserve will need to hike by 100 basis points at t... Read More

Key Insights

• 🫢 Inflation shock leads to strong dollar trend and rising yields.
• ☠️ Interest rate-sensitive sectors, such as cannabis and retail, experience significant losses.
• 🎭 Commodities perform well, with the Bloomberg Commodity Index indicating strength.

Questions & Answers

Q: How did the market react to the inflation shock?

The market experienced a bloodbath, with interest rate-sensitive sectors being hit the hardest. Two-year and ten-year yields reached new highs, contributing to the sell-off.

Q: What sectors were most affected by the inflation shock?

Sectors such as cannabis, social media, software, cloud storage, home builders, and retail, which are highly sensitive to interest rates, experienced losses of 5% or more.

Q: Will the market break down or experience a major rally?

It is unlikely that the market will break down or rally significantly in either direction. Expectations of inflation and rising interest rates will lead to continued volatility and fits and starts.

Q: How are commodities expected to perform in this market environment?

Commodities, especially natural resources, are expected to perform well in the current market environment. The Bloomberg Commodity Index managed to eke out only a 0.5% loss, indicating continued strength.

Summary & Key Takeaways

• Inflation shocker causes a continuation of the strong dollar trend and rising yields, leading to a bloodbath in equities.

• Interest rate-sensitive sectors of the market, such as cannabis, social media, software, cloud storage, home builders, and retail, are heavily affected.

• The market is expected to experience a lot of volatility for the rest of the year, with no clear trend in either direction.