🌎More People & Twisted Inflation.
GM friends and investors.
This week UK inflation hit another high, PPI (Producer Price Index) data came out, and the jobless claims report was released. But more on that later.
On Tuesday, the planet's population hit 8 billion people, according to projections from the United Nations.
As life expectancy rises, the number is expected to grow to 8.5 billion by 2030.
The S&P 500
Mixed results across the board here, and that is for a couple of reasons.
PPI data came in better than expected, showing potential signs of cooling inflation.
The Jobless claims report also came in better than expected, which means a strong labor market, the opposite of what you want to see in a high inflationary environment. (That is if you are the fed)
Twisted Results of Inflation
Inflation seems to be all anyone wants to talk about, but for a good reason. It has become one of the primary determinants of performance in the markets.
& we got more data to digest the week:
US supplier prices slowed in October for the second straight month, indicating that inflation pressures could be going away soon. PPI reflects the supply conditions in the economy, whereas CPI measures demand.
PPI climbed 8% in October compared to the same month a year ago. The pace marked an easing from September’s 8.4% increase and down significantly from the peak in March of 11.7%
The Producer Price Index reflects the changes in costs that producers are facing combined with the pricing power they command. In turn, it can indicate inflationary pressure building up through pipeline production.
Under normal circumstances, this would be a good thing. But, we are in an environment far from “normal.”
222,000 people filed for initial jobless claims last week. Which is down by 4,000 from the week before and continues to point to a strengthening labor market.
The Bottom Line:
The fed needs to see inflationary pressure ease.
A strong labor market indicates business is doing well, which fuels spending both by companies and consumers →adding to inflationary pressures.
Around the World
Uk inflation is even wilder.
The United Kingdom Consumer Price Index rose to 11.1% in October. Higher than the 11.1% rate in September and marking the highest level of inflation since January 1982.
British economists expected inflation would jump to 10.7%, about 40 basis points less than the actual results. The Rise comes after the hike in energy price caps in October due to high wholesale prices from Russia’s war on Ukraine.
In other news:
President Biden met Chinese Leader Xi Jinping this week to stop a downward spiral of relations between Washington and Beijing.
During the talks with Mr. Jinping, Biden brought up China’s increasingly aggressive action towards Taiwan and expressed concerns with China’s treatment of ethnic Uyghurs and other Muslim minorities in Xinjiang and Beijing’s suppression of civil liberties.
Bottom Line:
The White House said the two leaders agreed that a nuclear war should never be fought and can never be won, including language about the unacceptability of using nuclear weapons in the Ukraine war.
New Restrictions on Crypto
After the catastrophic downfall of FTX, other crypto exchanges issued new restrictions to stop the spread of the contagion.
Gemini, BlockFi, and Genesis announced restrictions on putting a pause on new loan originations and redemptions.
The Industry fears that what happened to FTX could spread and bankruptcy could be more likely for these new exchanges.
BlockFi seems to be in the worst shape of all the exchanges. Reportedly preparing for a potential bankruptcy filing and has already halted withdrawals and deposits.
That’s all for today!
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