9 Minute Read

Tackle Today: Inflation is Deflating

June 18, 2021

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Maybe it will be transitory after all.


Commodity prices and any stocks linked to the commodity markets are getting thrashed in the wake of the Fed meeting. I suspect Jerome Powell is quite pleased. Falling commodity prices support the Fed’s long-held narrative that the inflation uptick is transitory.

Skeptics will say it’s only a few down days, and the long-term trend for many inflation-sensitive assets remains higher. They’re not wrong.

But the bond market seems to believe in lower inflation to come. Inflation expectations are a significant driver of long-term interest rates. And they were tanking this week. If you want to follow along at home, use “TNX” for the 10-year yield and “TYX” for the 30-year yield.

If you believe the inflation trade will make a comeback at some point, that this is just a much-needed correction to remove some froth, then keep an eye on the charts of your favorite players. A bottoming pattern will form when big buyers finally return.


Chart of the Day


Did you know that lumber prices have been cut nearly in half? Consumers looking to build houses are dancing in the Streets. They’ve been praying for a stop to the madness and the market Gods finally saw fit to respond. The best hot take I’ve seen on why wood prices are finally returning to Earth is this: IT LITERALLY GROWS ON TREES!

Video of the day

Buy One Hold One Dump One

Coach Greg presents 3 stock ideas from Healthcare – $ABT $LMAT $XRAY – and Coaches Tyler abd Tim have to decide to ‘Buy One, Hold One, and Dump One’ in this segment from Thursday’s Cash Flow Club

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