📑 Research Notes for 2022-06-13
This week, we look at record inflation, the world's wheat supplies, real yields as a Fed indicator, and proposed changes for the stock market from the SEC.
We conduct extensive investment research and share the most interesting content that we come across every week. Here is a curated list of this week’s top observations.
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It’s Going to Take Demand Destruction To Tame Inflation.
Basically everything is going up. We haven’t seen price increases slow down the economy just yet. The housing market has cooled off, but the labor market is still super tight and earnings revisions have yet to come down. The biggest question now is how quickly will inflation change consumer spending and how quickly will that cool off inflation.
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What’s Up With the World’s Supply of Wheat?
Wheat crop yields and exports are withering worldwide. A food insecurity expert recently told the UN that there are only 10 weeks of wheat supplies left in the world after Russia’s invasion of Ukraine disrupted worldwide supplies. Further compounding the issue, water shortages in parts of the globe and overly wet conditions in others are dampening crop yields at a time when wheat shortages and prices are already heightened.
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Real Yields May Offer Clues About A Fed Pivot Point.
The outcome of the Fed’s balancing act between fighting inflation and preventing a recession is hard to predict. Rate hikes designed to tame inflation are pushing Treasury yields upward, making Treasuries more attractive to markets. But that could equally have negative impact on business investment and potentially hasten a recession. Could evaluating the real yield of US Treasuries offer investors an indication of a possible Fed pivot point?
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SEC Closes In On Rules That Could Reshape How Stock Market Operates.
The Securities and Exchange Commission is preparing to propose major changes to the stock market’s plumbing as soon as this fall.
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Last Week’s Market Performance Heatmap
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Curated by Joseph Lu, CFA®
Joseph is the founder and managing director of Conscious Capital Advisors and a CFA® Charterholder.
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