Inflation Has Spun Out Of Control

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In his Daily Market Notes report to financiers, while discussing inflation, Louis Navellier composed:
[soros] Q3 2021 hedge fund letters, conferences and moreDavid Teppers Foundation Invested In These FundsDavid Tepper of Appaloosa Management is one of numerous hedge funds to discovered a foundation to use for his philanthropic functions. The David Tepper Charitable Foundation has bought a handful of hedge funds and stocks over the last few years, including among Appaloosas funds. Here are Teppers preferred hedge funds based on the 990-PF filings Read MoreHot PPI
PPI was hotter than anticipated, the market reaction is not.
The PPI numbers can be found in this early morning and they were sky high as expected. While there is little doubt the Fed has all it requires to validate speeding up the tapering plans, and high appraisal stocks have actually been offering off in anticipation of a greater interest rate environment.
We will have to see and wait what happens when the largest purchaser by far, the Fed, rapidly slows and then stops making open market purchases. It might be a case of having to walk instead of speak with move the needle.
Inflation Spins Out Of Control
One reason why the Biden Administration and the Fed are under fire is that it is now widely perceived that inflation has drawn out of control due to the fact that the Fed has “over-primed the pump.”
The Treasury Department was selling lots of securities recently and although some yields rose a little, the Other and 10-year long bond yields were reasonably steady. Particularly, the Treasury Department sold $36 billion in 10-year bonds on Wednesday with foreign purchasers representing about 69% of all bidders. The bid-to-cover ratio was a healthy 2.43, so the 10-year bond yield just increased somewhat, to 1.518%.
Given that there continues to be robust demand for Treasury securities, that should enable the Fed to taper a bit more quickly and lower its quantitative reducing from $90 billion per month to $75 billion, or less, when they convene the Federal Open Market Committee (FOMC) today– with their decision due tomorrow.
As constantly, Wall Street loves to “climb up a wall of worry,” but I anticipate that given that the 10-year Treasury bond stays a sanctuary and fourth-quarter U.S. GDP development is anticipated to be spectacular, a strong U.S. dollar will continue to draw in foreign capital and keep rate of interest artificially low relative to inflation. This basically indicates that development stocks, along with dividend growth stocks, will remain a sanctuary for financiers.
December Rally
Tomorrows FOMC declaration in addition to the November retail sales report (also due out tomorrow) are forming up to be the catalysts that might push the stock market greater in the second half of December.
The second half of December has usually been positive for the marketplaces. The first half of December decreased 6 out of the last 10 years, while the second half advanced eight out of 10 times, with the 2nd half exceeding the very first 8 out of 10 times by approximately 2.6%. The chart listed below highlights.

Updated on Dec 14, 2021, 2:09 pm

Q3 2021 hedge fund letters, conferences and moreDavid Teppers Foundation Invested In These FundsDavid Tepper of Appaloosa Management is one of many hedge funds to found a foundation to utilize for his humanitarian purposes. The David Tepper Charitable Foundation has invested in a handful of hedge funds and stocks in recent years, consisting of one of Appaloosas funds. The Treasury Department was offering lots of securities last week and although some yields rose slightly, the Other and 10-year long bond yields were fairly stable. Specifically, the Treasury Department offered $36 billion in 10-year bonds on Wednesday with foreign buyers accounting for about 69% of all bidders.

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