It’s Friday! Am I the only one that still can’t get the Friday song by Rebecca Black out of my head? Let’s start off by looking at the Traders Reserve Economic Dashboard.
The change here was the 4-week moving average of estimated jobless claims climbed over 8k to 199.5K. Actual jobless claims came in at 218k, which was an increase of about 21,000 from the week before. While it’s the highest rate since January and shows that the economy could be softening, it’s still an extremely low number.
The sad thing for workers is that rising jobless claims is exactly what the Fed needs to see to fight inflation and a recession. The job market is so tight that companies have to pay workers more since the supply of workers is limited. Paying workers more drives up the cost of goods which leads to inflation, but as the Fed increases interest rates, the demand for labor should decrease. This means the job market gets more competitive for the workers since there will be fewer jobs, and employers get away with paying them less, thus helping to decrease inflation.
The real question is are we headed for a period of stagflation, which is when a period of high inflation combines with high unemployment and stagnant demand for goods and services.
Keep reading to find out why we need to review the past so we can go back to the future. I’m going to list out some of my favorite stagflation stocks you need to know about now.
Next week I’ll continue our exploration of the 1970s and the similarities to today’s market.
Stagflation in the ‘70s altered Americans’ way of life and brought an era of fuel conservation and rationing not seen since World War II. President Nixon signed the Emergency Highway Energy Conservation Act, which set the maximum speed limit to a fuel-efficient 55 mph. It stayed in effect until 1995. In the ‘80s, the rock icon, Sammy Hagar wrote the song, I Can’t Drive 55, in defiance of the act that had been in place for a decade at the time.
I think the covid pandemic was a different situation and it shows just how interconnected everything in the economy, or the world really, is to one another. It’s not a terrible surprise that a few years later we’re still trying to get the world turning again and going through hurdle after hurdle to get there.
We’ll talk more about lost decades and stagflation next week and why you need a trading plan that will perform better than buy-and-hold.
For now, here’s a list of companies that I think are long-term plays should we go through a period of stagflation.
If you have any questions, comments, or anything we can help with, reach us at any time.
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Jeff
Guest Writer, Filthy Rich, Dirt Poor
Editor, Wealthy Investor Society
Just how correlated are consumer expectations with the reality of the market? Can this be used to predict where market prices will go?
Keep reading…
Then something happened in the market today and this one chart may be presenting a different side to the story. This chart pattern may be signaling the next leg down is right around the corner and now is the time to get ready.
Let’s look at a strategy you can use by selling stock options to potentially take advantage of a near-term bump in the ride-sharing companies.
Selling options for weekly premiums can be a good strategy if you know how to navigate the extreme peaks and valleys each week.
If you are an options trader and want to take on a little risk, I’ll show you an options trading strategy with a potential 55% gain by July 22, 2022.
With the Energy stocks beaten up so much last week, I wouldn’t be surprised if we see a little bump back up this week.
I have an idea for an Energy trade.
Get Today’s Trade Idea
We’re going to stick with point-and-figure charts today. The energy sector has been red hot but has lost some ground over the last few days. Oil and Gas companies could be negatively affected by a slowing global economy.
What is the Fed Doing?
In an effort to combat out-of-control inflation, the Fed is increasing interest rates to slow down the growth of the economy. The trick is to do so without causing a recession.
Zoom has become so part of our vernacular, that people use it as a verb. Sort of like how people ask for a Kleenex, even though that’s just a name brand of facial tissue. So if everyone is still Zooming, at home, at work, and at school, why has the stock been falling?
Keep reading to see if discretionary spending and the price of oil are correlated and if we can pick a market bottom.
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