In general, when rises in the Consumer Price Index (inflation) are moderate, the bond market will rally, and when increases in the CPI are significant, the bond market will collapse. When it comes to CPI data, the equities markets tend to follow the same pattern as the bond market. In other words, when CPI statistics […]
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Inflation is defined as an increase in the cost of goods and services, which reduces the purchasing power of the currency. Consumers can buy fewer things when inflation rises, input prices rise, and earnings and profits fall. As a result, the economy slows until the situation stabilizes. Why is inflation detrimental to stocks? Investors attempt
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Stock index futures, such as the S&P 500 E-mini Futures (ES), reflect expectations for a stock index’s price at a later date, based on dividends and interest rates. Index futures are two-party agreements that are considered a zero-sum game because when one party wins, the other loses, and there is no net wealth transfer. While
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When inflation is high, value stocks perform better, and when inflation is low, growth stocks perform better. Is rising inflation beneficial or detrimental to stocks? “Investors should continue to keep equities since stocks normally outperform in times of inflation, especially if it is accompanied by growth.” Consumer staples stocks, such as food and energy, perform
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Nondurable items have a key role in the economy, accounting for a considerable portion of GDP. In the areas of personal consumption, exports, and government purchases, nondurable products account for a large amount of a country’s gross domestic product. Here’s where you can learn more about GDP. What do non-durable products mean in terms of
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In the last six years, an average of 31% of companies have given average raises of 3% or more. In 2022, 44% of companies intend to grant salary raises of more than 3%. Inflation was 7.5 percent higher in January 2022 than it was a year earlier, a 40-year high. Are wages adjusted for inflation?
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Gold has long been thought to be a good inflation hedge. In reality, many people have looked to gold as a “alternative currency,” especially in countries where the national currency is depreciating. When their own currency fails, these countries often resort to gold or other strong currencies. Gold is a genuine, tangible asset that, for
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To listen to the podcast, press play on the player above and follow along with the transcript below. In its current form, this transcript was created automatically and then edited for clarity. Between the audio and the text, there may be some discrepancies. Republican attempts to invalidate state-ordered congressional districting schemes in North Carolina and
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CFDs are not futures contracts in and of themselves, but they allow investors to trade the price movements of futures. CFDs do not have pre-determined expiration dates and trade like other assets with buy and sell prices. CFDs or futures: which is better? CFDs and futures are two different ways to trade a variety of
Inflation raises the price of products and services over time, reducing the quantity of goods and services you can buy with a dollar today versus a dollar in the future. If salaries stay the same but prices of products and services rise over time due to inflation, purchasing the same good or service will require
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