bungeemelody
2022-08-15

Nice 

@WayneqqAlthough it looks like inflation is easing.. it is important to see it from the perspective of theconsumers and how they can afford things.. rise in wages have not kept up with inflation.. we are talking about 8+% rise in inflation on a month on month basis.. what this means is an item that cost 100 bucks last month is going to cost more than 108 bucks this month.. and going to cost more than 116 bucks (108*1.08) next month.. i dun believe anyone wages is going up by that amount.. Businesses would either pass this cost to consumers or absorb it themselves.. Absorbing it means lower profit.. hence reduce earnings and stock prices would likely go down.. Passing to consumers means less people can afford or want to buy if it is discretionary products and services means less revenue and potentially less profit.. again reduce earnings.. only those companies with essential products and services can weather this better.. Inflation is still very high and i think it is too early to say it is under control.. however.. the cure for high prices is high prices.. whether interest rates rise or not does not really matter asit has now become an affordability issue.. if the price is so high that noone can afford.. there will be a surplus of goods and services and that will bring down the price.. supply and demand.. The reason why the feds want to raise rates isto prepare for the next recession which is pretty much guaranteed so they have room to cut rates to boost the economy again..
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment