Displaying items by tag: inflation

(New York)

The market has been on a tear recently, but you wouldn’t know it from looking at small caps. Despite the broader rise in indexes, the Russell 2000 has not hit a fresh high in a month. Investors are wondering why, and the reason is pretty clear: inflation fears. Small caps are not seen to have as much pricing power as their larger peers, so as input costs rise, they get hit with lower margins.

FINSUM: There is nice clear and succinct reason why small caps have been underperforming over the last month. The good news is that inflation fears are subsiding, which means small caps should rebound accordingly.

(New York)

Wells Fargo’s head of real asset strategy John LaForge says gold could hit…see the full story on our partner Magnifi’s site

(New York)

The prospect for rising inflation has been terrifying the market, and investors need a way to play it. April gold futures peaked at $1750 on intraday trading after the recent Federal Reserve decision to leave the federal funds rate unchanged, and that tells investors something important: gold may be the way to go. Moreover, Powell said the fed funds rate would remain unchanged until 2023, even if economic news improved. The Fed even plans to tolerate higher than 2% inflation given inflation has averaged well below the Fed’s Target the past year. This was enough to spike gold prices as investors are now as concerned about future inflation as many investors see the commodity as a hedge. Treasury yield rises had many investors worried the Fed would preemptively tighten, and Gold was down before investors realized how committed the Fed was.

FINSUM: Spreads between inflation-indexed and nominal bonds (TIPS spreads) indicate that rising yields are driven by inflation risk. Gold is one of the most assured hedges against future Inflation.

(New York)

The ten-year treasury yield hit one year high at 1.6% on Friday, just after President Biden signed the $1.9 trillion stimulus package into law. Some are arguing that this is a new equilibrium for…view the full story on our partner Magnifi’s site

(New York)

The price of gold has been in a slump after it reached all-time highs mid pandemic. A variety of micro and macro factors are melding to put this commodity in a major second rally ...View the full story on our partner Magnifi’s site