Inflation.
It’s going to be the top issue in the election and for investors. President Joe Biden says it is his top priority.
Bizarrely, even amidst inflation, the dollar still stands triumphant over other nations’ currencies, as “Mr. X” showed yesterday.
But we’re going to get a game changer today.
The Consumer Price Index report for April is about to hit. What people are counting on is that inflation has already peaked last month.
Assumptions like this are extremely dangerous. Like with earnings reports, they serve as useful reminders that trading is as much about psychology as hard numbers.
The expectation is for a 0.2% rise and a year-over-year increase of just over 8%.
If it’s more than that, it will be an economic firestorm. There’s always the terrifying question – what if the Fed simply can’t stop inflation?
Fear can spread like a pandemic. Panic can spread quickly and take on momentum of its own.
Of course, so can hope.
At moments like this, it is important to stick to your plan.
Use your head, not your heart.
Most investors are going to be simply reacting, operating on emotion rather than knowledge.
“The most important element in trading is a positive mindset,” says Options Coach Chris Hood. In today’s column, he describes practical ways for you to make money in a bear market.
That doesn’t necessarily mean the sky is falling. We have to see what happens. But as we get more information, we can carry out our plan.
The key is to have moves ready for both a market recovery and for panic.
Don’t be swamped by the storm. Learn to ride it. Learn to channel its power for your own gain.
Check out Chris Hood’s column today. It’s not enough to just be “prepared for the worst.”
It’s like jujitsu – turn the market’s own momentum against it. Bend it to your will.
And profit as others panic.
WORD ON THE STREET
Expectation Games, Debt Hits New Record, Trump Back To Twitter?
-
Is The Worst Over? – The Consumer Price Index will be the big news of the day, with most experts predicting that the worst of inflation is over. That’s what investors want to see because if inflation hasn’t been tamed, we could see higher interest rate hikes. Cleveland Federal Reserve President Loretta Mester has already expressed support for two more consecutive half-point hikes. More worryingly, she said “we don’t rule out 75 forever, right?” Considering what a three-quarters of a percentage point rate hike would do to the market, I was kind of hoping we were ruling it out forever.
-
Musk Says He’ll Lift Trump Ban – While still in office, President Donald J. Trump lost his access to social media. However, if Elon Musk can complete his takeover of Twitter, he says the ban will be gone. “I would reverse the permanent ban,” he said, adding that Twitter’s action was a “mistake.” Twitter shareholders might be nervous about Musk leaving himself an out. “So this is not like a thing that will definitely happen, because what if I don’t own Twitter?” he asked rhetorically.
-
Biden Pivots To Inflation: Reeling from GOP accusations that he isn’t doing enough to fight inflation, President Joe Biden is now taking on the challenge directly. Calling it his top domestic priority, President Biden blamed the pandemic on supply chain disruptions from the COVID-19 pandemic and the Russian invasion of Ukraine. He also tried to pin inflation on the GOP. “Their plan is actually going to make working families poorer,” he said.
-
Seeing Red – Consumer debt and credit increased by 1.7% in the first quarter of 2022, reaching about $15.84 trillion. Yes, trillion. Credit card debt decreased slightly but mortgage debt is at $11.18 trillion, up 10% from the same time last year. Student loan debt is also up by $14 billion. Not surprisingly, progressives are demanding President Biden to forgive as much of the student loan debt as possible.
!
HOT SPOTS: What’s Going on in Geopolitics
-
Ukrainian Counterattack Pushes Back Russians – Ukrainian forces took back villages in the north around the important city of Kharkiv. However, in the south, Russia is continuing to launch strikes against Odesa, perhaps the most important long-term target for Russian forces.
-
Shanghai Lockdown Expands – Well, this isn’t good for global growth. Despite a fall in caseloads, the lockdown in place in Shanghai is actually expanding. Citizens are reportedly scuffling with Chinese police dressed in hazmat suits. Residents are even removed to separate facilities if infections are found on their apartment floor. Look for civil unrest in China as well as more lockdowns. This could very easily spiral out of control.
-
EU May Pay Hungary To Commit To Ban On Russia Oil – Hungary and its conservative leader Viktor Orban are the biggest barriers to a European Union ban on Russian oil exports. Orban has called it a nuclear bomb in terms of what it could do to his country’s economy. He’s also coming off a solid election win, so he’s politically strong. However, the EU and Hungary are reportedly nearing a deal – though that may mean more economic aid to Budapest to lessen the damage. The canny Orban needs to show that he’s putting Hungary first without cutting off the gravy train from Brussels.
CUTTING EDGE: What‘s Happening In Tech
-
Bitcoin City In El Salvador – Perhaps not the best timing for this. President Nayib Bukele unveiled pictures of a supposed new city that will be a kind of crypto utopia. The golden mock-up may look impressive but with BTC struggling to stay above $30,000, the promise of a city generating Internet money using geothermal power may look fanciful rather than futuristic. Thus far, there has been no actual construction.
-
Bitcoin City In El Salvador – Perhaps not the best timing for this. President Nayib Bukele unveiled pictures of a supposed new city that will be a kind of crypto utopia. The golden mock-up may look impressive but with BTC struggling to stay above $30,000, the promise of a city generating Internet money using geothermal power may look fanciful rather than futuristic. Thus far, there has been no actual construction.
-
Bitcoin City In El Salvador – Perhaps not the best timing for this. President Nayib Bukele unveiled pictures of a supposed new city that will be a kind of crypto utopia. The golden mock-up may look impressive but with BTC struggling to stay above $30,000, the promise of a city generating Internet money using geothermal power may look fanciful rather than futuristic. Thus far, there has been no actual construction.
FOR YOUR CONSIDERATION
“Most newer traders have never known a bear market, where equity prices are down 20% or more from recent all-time highs. In fact, before the pandemic in March 2020, we had been in a continuous bull market for nearly 11 years. The typical 25-year-old trader was just 14 during the last sustained downtrend.”
It’s a new era. Millions of traders entered the market for the first time during the COVID-19 pandemic. Now, many are feeling the cold grip of panic.
Don’t be one of them. You’ve got an Options Coach at your back. Chris Hood will show you how to turn a bear market to your advantage.
The information in this email is intended for informational purposes only and does not guarantee specific results as there is a high degree of risk involved with trading. Also, our traders are real traders and may have financial interests in the companies discussed. Please see our Terms and Conditions for more information