Inflation

[divs4ever]

Can't put the best people on the job divs, we have diversity quota's to fill.

yes , i used to make some managements cringe when i would proudly proclaim i was the ' token Australian ' ( and it wasn't that far from the truth , even back in the 1980's )

it took a long time to get where we are , now

 

[divs4ever]

Too much fear around inflation when no one know's what will happen with covid in the mix. Relax & prepare

I found this a good read - Will We Go From Pandemic to Recession?

i am not convinced that we are avoiding a Recession currently ( so much other current data is fudged , why not that as well ??)

 

[divs4ever]

EXPOSING THE TRUTH BEHIND FOOD SHORTAGES​

 

[qldfrog]

I can not stop LOL ROL at the fact that we have having beef supply and meat /beer shortage due to "Lack of CO2"

 

[divs4ever]

oh yes the irony

luckily i prefer spirits

 

[mullokintyre]

tomorrow is a big day when the December Inflation data comes out from the ABS.
According to Chaennel 7

This week's latest inflation figures are likely to fuel speculation of an interest rate rise by the Reserve Bank of Australia this year, coming just days after an unexpected rapid drop in the unemployment rate.

The Australian Bureau of Statistics will release the consumer price index for the December quarter on Tuesday.

Economists forecasts point to a one per cent increase in the quarterly CPI, largely reflecting higher petrol prices and the increased cost of new housing.

Then of course on Wednesday, having digested this news with their spicy beef snags they have for Australia Day, the RBA will release their deliberations on the Interest Rates.

This would take the annual rate to 3.1 per cent, up from three per cent as of the September quarter, and just above the RBA's two to three per cent target.

The more interest-rate sensitive underlying measure of inflation - which smooths out sharp price swings - is forecast to rise 0.7 per cent in the December quarter.
would take the annual rate to 2.4 per cent and up from 2.1 per cent as of the previous quarter, which was the first time it had been within the target since 2015.

Such a result would be stronger than the 2.25 per cent the RBA had been expecting at this stage, with a level of 2.5 per cent not predicted until mid-2023.

Similarly, last week's December labour figures showing a stunning drop in the jobless rate to 4.2 per cent was a faster decline than the central bank had forecast, having not expected 4.25 per cent until the end of this year.

The inflation figures may not come in at `%, could be higher or lower.
But given the RBA has consistently underestimated the CPI and employment figures, I know where I will be putting my money.
Mick

Edited . The RBA will give its decision NEXT Thursday, not this Thursday.
Mick

 

[JohnDe]

A quote from Warren Buffett, the Chairman of Berkshire Hathaway in 1994, he wrote:

“We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen. Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, the resignation of a president, the dissolution of the Soviet Union, a one-day drop in the Dow of 508 points, or treasury bill yields fluctuating between 2.8% and 17.4%.” (emphasis added).

Panic and fear earns you nothing, research and diligence creates opportunity.

 

[Jeda]

A quote from Warren Buffett, the Chairman of Berkshire Hathaway in 1994, he wrote:

“We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen. Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, the resignation of a president, the dissolution of the Soviet Union, a one-day drop in the Dow of 508 points, or treasury bill yields fluctuating between 2.8% and 17.4%.” (emphasis added).

Panic and fear earns you nothing, research and diligence creates opportunity.

I like panic and fear, offers better discounts keep an eye on investing forums for a general guide on which way the public is going.

 

[JohnDe]

I like panic and fear, offers better discounts keep an eye on investing forums for a general guide on which way the public is going.

True, but picking the peak is the tricky part.

Investors hold nerve on ASX 200 but strategists warn of rocky year​

​

Investors have held their nerve, pouring money back into shares after a worrisome start to the year.​

However, leading strategists and fund managers warned of a rocky year ahead as rising inflation and a peak in the Covid-19 pandemic leads to a faster withdrawal of policy support.​

​

After falling as much as 7 per cent in the past three weeks as US shares had their biggest fall in more than a year, Australia’s benchmark S&P/ASX 200 share index mostly recovered from a 1.2 per cent intraday fall to an eight-month low of 7086.8 points on Monday....​

NoCookies | The Australian

www.theaustralian.com.au

 

[CityIndex]

The Q4 CPI print came in higher across the board, and together with the strong employment figures last week, it’s looking increasingly likely that the RBA will end QE at their February meeting.

Speculation of a rate hike by the Aussie central bank could also cause the equity market to diverge from AUD/USD, with the currency pair trading higher on the data release, while the ASX200 is seemingly eyeing a break below 7000.

All trading carries risk, but should be interesting to see how the two markets play out over the rest of the week with the Fed’s interest rate decision on Thursday morning as well.

 

[mullokintyre]

The Q4 CPI print came in higher across the board, and together with the strong employment figures last week, it’s looking increasingly likely that the RBA will end QE at their February meeting.

Speculation of a rate hike by the Aussie central bank could also cause the equity market to diverge from AUD/USD, with the currency pair trading higher on the data release, while the ASX200 is seemingly eyeing a break below 7000.

All trading carries risk, but should be interesting to see how the two markets play out over the rest of the week with the Fed’s interest rate decision on Thursday morning as well.

Yes, once again the experts got it wrong.
Inflation is not only rising, but it is rising more quickly every month.
if the December figure of .5% were repeated every month we would have 6% inflation per year.
RBA gov Lowe's statements about no interest rate rises till the end of 2024 look more and more embarrassing.
Mick

 

[Tyre Kicker]

Writing as been on the wall re inflation for some time now.

Those leveraged to the hilt after purchasing property for insane prices will be feeling a little ill with the genie well and truly out of the bottle.

Interesting times ahead.

 

[JohnDe]

Writing as been on the wall re inflation for some time now.

Those leveraged to the hilt after purchasing property for insane prices will be feeling a little ill with the genie well and truly out of the bottle.

Interesting times ahead.

It will be interesting.

There are many that have mortgaged themselves to the hilt thinking that low interest rates would last long enough for them to not care. Then there are the savers, the many who have squirrelled away all their money waiting for an opportunity.

Treasurer Josh Frydenberg has repeatedly told us about the“damn lot of money” Aussies have stashed away over the last few Covid years. As of late last year, this stash was valued at $260bn. And the nation’s number one seed when it comes to crunching money believes this will power the expected booming economic recovery. But could this optimism be trumped by a stock market crash?​

​

Overnight, the US stock market was in slide mode, which is bound to take our share prices down today. And a former big call merchant, Boston’s Jeremy Grantham, has tipped a 45% crash! Happily, the 83-year old Grantham has had a bad run for some time.​

​

Incidentally, he’s been tipping a huge Australian property crash for over a decade. When it comes to predictions, you have to get the timing right.​

​

The CBA economics team calculated that we’ve saved about $260bn since the Coronavirus hit us and the economy.​

Will our pandemic-induced savings motherload kill talk of a 45% crash of stocks?

CBA’s economics team calculated Aussies have saved about $260bn since Covid hit. Will this mountain of money protect us from a crash?

switzer.com.au

 

[JohnDe]

The Q4 CPI print came in higher across the board, and together with the strong employment figures last week, it’s looking increasingly likely that the RBA will end QE at their February meeting.

Speculation of a rate hike by the Aussie central bank could also cause the equity market to diverge from AUD/USD, with the currency pair trading higher on the data release, while the ASX200 is seemingly eyeing a break below 7000.

All trading carries risk, but should be interesting to see how the two markets play out over the rest of the week with the Fed’s interest rate decision on Thursday morning as well.

Fuel, housing push inflation to 3.5pc

Inflation has accelerated sharply to 3.5 per cent over the year to December, from 3 per cent, underpinned by further large increases in petrol and housing construction costs.​

​

The latest figures from the Australian Bureau of Statistics showed a significantly larger than expected 1.3 per cent increase in the December quarter, after lifting by 0.8 per cent over the three months to September.​

​

The biggest inflationary drivers over the quarter were for new dwelling purchases, up 4.2 per cent, and a 6.6 per cent lift in petrol prices over the three months.​

​

Underlying inflation – which strips out more volatile goods such as fuel and groceries – lifted to 2.6 per cent over the year, from 2.1 per cent, based on the ABS’s trimmed mean measure.​

​

Trimmed mean CPI grew by 1 per cent for the three months – also well higher than predicted by economists.​

​

This core consumer price growth measure is now firmly within the Reserve Bank of Australia 2-3 per cent target range, and climbing consumer price pressures raise the spectre of earlier than anticipated rate rises, with the RBA due to hold its first meeting of the year next Tuesday.​

​

RBA governor Philip Lowe has maintained that rates will not rise until late next year.​

​

Wages lifted by 2.2 per cent over the year to September, on the latest ABS figures, underlining the challenges for policymakers to boost pay amid rising cost-of-living pressures.​

​

The national average weekly retail unleaded petrol price rose by 3.3 cents to an equal record high of 170.4c per litre last week, according to the Australian Institute of Petroleum.​

​

This is another issue to factor in -

Business confidence sinks under Omicron wave: NAB business survey

The Omicron outbreak has sent business confidence plunging into negative territory in December and below the low recorded during the Delta wave as companies fret the surge in Covid cases will flatten the nation’s economic recovery from lockdowns.​

​

NAB’s monthly business survey showed a spike in corporate pessimism across the country, with the bank’s national business sentiment index dropping 24 points to -12pts, where a reading below zero reflects more pessimists than optimists.​

 

[Smurf1976]

Those leveraged to the hilt after purchasing property for insane prices will be feeling a little ill with the genie well and truly out of the bottle.

An issue there is I expect many won't have done the maths and simply don't comprehend what an x% interest rate increase means to them in actual $.

 

[divs4ever]

An issue there is I expect many won't have done the maths and simply don't comprehend what an x% interest rate increase means to them in actual $.

many will not work out ( quickly ) there will be more than one increase ( and NO , i have no idea how many more after 2 increases , the system might implode after two , or might stagger on for four or six or ten )

 

[Smurf1976]

In the short term, next few months, we may see some improvement in data from the US. If that's so, well there's fuel for a change in sentiment and a decent rally in stocks.

Note that doesn't mean anything fundamental has changed at all, it's just about the math.

US CPI (annual rate)

January 2021 = 1.4% with previous months similarly low

February 2021 = 1.7% the first uptick albeit not much

March 2021 = 2.6%

April 2021 = 4.2%

May 2021= 5.0%

June 2021 = 5.4%

July 2021 = 5.4%

At the moment we're seeing 7% (December 2021) based on what was an essentially flat baseline of minimal CPI inflation 12 months prior. Once we get to February and especially March onwards though, the annual figure will be from a higher baseline and my expectation is we'll see less than 7% year on year growth from that already higher base.

Or in other words, the statistics should show a decline at that point and therein lies fuel for the Fed / market to say "look it's working, we only hiked rates once and it's already getting it sorted" and with that comes an assumption that there won't be many rate hikes at all and there comes a major rally in stocks.

Then in due course the reality that the problem hasn't really been fixed ripples through, my expectation being that energy prices will be the key trigger there, and then the real panic starts.

Just my two cents. I could well be completely wrong.

 

[qldfrog]

In the short term, next few months, we may see some improvement in data from the US. If that's so, well there's fuel for a change in sentiment and a decent rally in stocks.

Note that doesn't mean anything fundamental has changed at all, it's just about the math.

US CPI (annual rate)

January 2021 = 1.4% with previous months similarly low

February 2021 = 1.7% the first uptick albeit not much

March 2021 = 2.6%

April 2021 = 4.2%

May 2021= 5.0%

June 2021 = 5.4%

July 2021 = 5.4%

At the moment we're seeing 7% (December 2021) based on what was an essentially flat baseline of minimal CPI inflation 12 months prior. Once we get to February and especially March onwards though, the annual figure will be from a higher baseline and my expectation is we'll see less than 7% year on year growth from that already higher base.

Or in other words, the statistics should show a decline at that point and therein lies fuel for the Fed / market to say "look it's working, we only hiked rates once and it's already getting it sorted" and with that comes an assumption that there won't be many rate hikes at all and there comes a major rally in stocks.

Then in due course the reality that the problem hasn't really been fixed ripples through, my expectation being that energy prices will be the key trigger there, and then the real panic starts.

Just my two cents. I could well be completely wrong.

Makes perfect sense and a potential scenarios.never underestimate the to put it lightly low mental sharpness of the huge majority, and this is not even linked to education level:
Covid scams, CC narrative, even covid arrival..months behind and sometimes unable to get big pictures.they will react when too late..and "they" includes many miversand shakers of the larkets, your super and fund managers as well as your smsf etc
You should always play the masses in shares, not try to, God forbid, guess or plan their behaviour..just be in front of the Lemmings, ride the wave...

 

[over9k]

In the short term, next few months, we may see some improvement in data from the US. If that's so, well there's fuel for a change in sentiment and a decent rally in stocks.

Note that doesn't mean anything fundamental has changed at all, it's just about the math.

US CPI (annual rate)

January 2021 = 1.4% with previous months similarly low

February 2021 = 1.7% the first uptick albeit not much

March 2021 = 2.6%

April 2021 = 4.2%

May 2021= 5.0%

June 2021 = 5.4%

July 2021 = 5.4%

At the moment we're seeing 7% (December 2021) based on what was an essentially flat baseline of minimal CPI inflation 12 months prior. Once we get to February and especially March onwards though, the annual figure will be from a higher baseline and my expectation is we'll see less than 7% year on year growth from that already higher base.

Or in other words, the statistics should show a decline at that point and therein lies fuel for the Fed / market to say "look it's working, we only hiked rates once and it's already getting it sorted" and with that comes an assumption that there won't be many rate hikes at all and there comes a major rally in stocks.

Then in due course the reality that the problem hasn't really been fixed ripples through, my expectation being that energy prices will be the key trigger there, and then the real panic starts.

Just my two cents. I could well be completely wrong.

Yep, yellen's on record forecasting this entire year to be a mess but next year to be back to something more normal, take that for whatever you think it's worth.

 

[over9k]

many will not work out ( quickly ) there will be more than one increase ( and NO , i have no idea how many more after 2 increases , the system might implode after two , or might stagger on for four or six or ten )

Three 25 basis point hikes have been forecast by the fed itself I believe. The current debate is whether there will be any more than that and/or whether the hikes will be higher.