To The Moon

Investors are at high risk ahead of the consumer price index (CPI), based on a dovish Fed turnaround after last week's jobs report. JPMorgan Chase believes that for the stock market, as long as the CPI rises higher than the previous value of 8.3%, it will be a big problem.

I think the Ukrainian-Russian war has triggered hyperinflation, and the Fed needs to keep raising interest rates to suppress inflation, so the cycle of inflation rate hikes continues. I believe that the United States has not experienced such a strong inflation cycle for a long time, which has led to the rise in the value of fossil fuels, resulting in high transportation costs and raw material prices. The price of consumer goods will also rise inadvertently, so many citizens cannot afford these daily necessities and live a hard life.

Although the unemployment rate is hovering at a low level, salaries have been overshadowed by the increase in inflation. Moreover, some companies have not increased their salaries due to poor business, so people are reluctant to get unemployment benefits. less than the life they deserve, so most people prefer to rely on government aid to be more practical. I think this chain reaction, people don’t want to work, will affect companies’ difficulty in recruiting manpower, which will make companies less willing to recruit and reduce costs, which will lead to less tax for companies, which will greatly reduce the government’s tax revenue, but the government’s expenditure is Aid to the unemployed is needed, as government revenue far exceeds expenditure in the long run. In addition, citizens who receive aid will not actively consume, and can only afford daily expenses, but do not have additional savings to consume to drive the economy. It affects investors' confidence in investing in U.S. stocks; and the rise of U.S. stocks is benefited from good economic development and growth. Without a good economy, how can investors have the confidence to invest heavily in U.S. stocks?

All in all, I think the U.S. economy is heading for a recession, and there is reason to believe that JPMorgan Chase said that the U.S. stock market may fall to 5%, which is not impossible.

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