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Bullish run in stocks that lost steam before the close – does that qualify as a reversal? Given the other moves such as in the Dow Industrials, Russell 2000 and emerging markets, it‘s unlikely that the S&P 500 met more than a temporary setback. Just look at the rush into risk-on assets as an immediate reaction to the infrastructure and taxation plans – see the high yield corporate bonds moving higher (and this time also investment grade corporate bonds finally) as long-dated Treasuries keep losing ground, and the dollar noticeably wavered. Yes, emerging worries about how this will be all paid for – not that an ideological challenge to modern monetary theory would be gaining any traction, but rather what would be the (quite predictable) effect of steep tax increases? Reduction in economic activity, unproductive moves to outset the effects, decrease in potential GDP? Remember the time proven truth that whatever the percentage rate, the government always tak ....
Biden just announced an ambitious and expensive infrastructure plan. Will it rebuild gold? Yesterday (Mar. 31), President Joe Biden announced the big infrastructure plan , the second major legislative initiative after the $1.9 trillion coronavirus relief plan passed in early March. The proposal includes about $2.2 trillion in new spending over eight years, boosting government expenditures even further . Despite the name, the plan assumes that only a part would be spent on infrastructure. To be more specific, Biden wants to spend $600 billion on transportation infrastructure (such as bridges, roads, airports, etc.), and more than $300 billion on improving utilities infrastructure (drinking-water pipes, electric grids, broadband). He also proposes to put more than $300 billion into building and upgrading housing and schools, $400 billion to care for elderly and disabled Americans, and almost $600 billion in research and development infrastructure, manufacturing, and jo ....
How about both. You can t go ten minutes on financial media these days without coming across a reference to inflation. That is, consumer price inflation to be more exact the measurement of changes in the prices of consumer goods and services that the entire world has been hoodwinked by central banks into thinking is the definition of inflation. The proper definition of inflation is the expansion of money and credit in an economy. On that definition, most major economies have been experiencing high inflation for decades. Sigh, nevertheless, the focus for the markets at this moment is on a potential rise in consumer price inflation. The general underlying narrative from conventional analysts is that this is a good thing for markets because it is preferable to consumer price deflation. But is it? ....