Sonu Varghese
Inflation Is Last Year’s Problem and Stocks Love It
In my opinion, the June inflation report was picture perfect. The consumer price index (CPI) fell 0.1% in June, which was below expectations. Core CPI, which strips out the volatile food and energy components, rose just 0.1%. These were below expectations, and combined with April and May data, reverses the “heat” we saw in the …
Sonu Varghese
July 12, 2024
Don’t Miss the Best Years of the Market and Lock into Poor Outcomes
The stock market has been on a tear for more than 18 months now, with the S&P 500 up 44% from December 31, 2022 to July 8, 2024. We’ve consistently maintained that momentum begets momentum, and my colleague, Ryan Detrick, has written time and again as to why there’s more than enough reason to be …
Sonu Varghese
July 9, 2024
Is It Time to Worry About Employment?
I’ve noted in the past how the US economy primarily relies on consumer spending, and since consumer spending is driven by income growth, the employment situation is pretty much the ballgame. And right now, things are getting a tad uncomfortable. We’re not quite worried yet, but simply recognize that risks are rising. What’s running strong, …
Sonu Varghese
July 5, 2024
NVIDIA: An Incredible Profit Growth Story
NVIDIA briefly overtook Microsoft last week to top the charts as the most valued company in the world measured by market capitalization. The stock has pulled back since then, but it was up 156% year to date through last Friday (June 21st). This amazing run comes on the heels of a 239% return in 2023, …
Sonu Varghese
June 25, 2024
How Does One Positively Expose Themselves to Luck While Investing?
The title was actually a question I put to Professor Jeremy Siegel when Chief Market Strategist Ryan Detrick and I hosted him on a live Facts vs Feelings episode recently. (You can listen to the episode here.) Of course, the question assumes you need luck while investing, and I think a lot of you reading …
Sonu Varghese
June 20, 2024
No! Saudi Arabia is Not Ending Any “Petrodollar Pact”
Fake news alert: Saudi Arabia is not going to stop selling oil in US dollars (USD), and they’re not ending any petrodollar pact. In fact, there is no petrodollar pact, secret or otherwise. So, there’s nothing to renew (or not renew). Nor is there any “paradigm shift” shift in global finance. The rather mundane truth …
Sonu Varghese
June 18, 2024
Inflation Is Headed Lower, and That Means Rate Cuts Are Coming
The Consumer Price Index (CPI) report was a welcome “surprise” after a string of uncomfortably hot inflation reports. I put quotes around the word surprise, because in January and April, there was nothing within the inflation data or outside of it (e.g. inflation expectations, wage growth data) that suggested inflation was on a persistently higher …
Sonu Varghese
June 13, 2024
May Payrolls Tell Us the Consumer Is Not Weakening
Job growth continues to catch most people by surprise, rising 272,000 in May. That was well above expectations for a 180,000 gain. In fact, “whisper” expectations (as much as one can glean from online chatter amongst economists and strategies) seemed to be tilted to a downside surprise, perhaps close to 150,000. Mostly because we’ve had …
Sonu Varghese
June 7, 2024
Consumer Confidence Is Likely Low Because Americans Are Stuck
Poor consumer confidence has been bit of a puzzle recently, given historically low unemployment and easing inflation. In fact, the “misery index,” which is the sum of the inflation rate and the unemployment rate, looks quite normal. It sits at 7.3% as of April, which is below the historical average (1950-2023) of 9.3%. Meanwhile, consumer …
Sonu Varghese
June 4, 2024
Big Picture: There’s No Inflation Resurgence
Hotter-than-expected inflation data in the first quarter led to a lot of concern that inflation is likely to rear its ugly head again. However, as I pointed out in several blogs over the first few months of the year (including two weeks ago), there was really no need to panic if you just peeked under …
Sonu Varghese
May 31, 2024