Inflation Kicks Off 2022 with a Bang – Closing Bull Jan. 14th, 2022
Quick Summary:
In this week’s Closing Bull, we’ll be discussing Inflation kicking off 2022 with a bang, home buying prices soaring on the market, celebrities being sued for supporting crypto scams, Goldman Sachs predicts the eurozone’s economy will grow faster than the US’s in the next two years, President Biden’s $1.8T Build Back Better Act is currently on ice, and the market is closed on Monday for Martin Luther King Day.
Let’s get into the news!
Key News This Week:
System update
Inflation kicks off 2022 with a bang
Home buying prices are soaring on the market
Celebrities are being sued for supporting crypto scams
Eurozone’s economy to grow faster than the US’s in the next two years
Biden’s Build Back Better Bill is on hold
Markets closed for Martin Luther King Day
Read the Transcript
Hi and welcome to my financial markets’ re-cap for the week.
Before we get to the news, a quick update on the system. We were sitting on our hands this week, no trades.
It’s a rare occurrence when what you expect to happen, happens exactly as you forecasted.
As I mentioned last week the market would likely see a bounce this week but would be followed by more selling.
At this point, I would be surprised to not see at least a 10% pullback in the Nasdaq. We might not get that in the S&P 500, but a new lower low in the NQ, and we will be there.
Corrections are really healthy for the market and are especially good when you are sitting them out and waiting to strike.
So, things are going our way and we will be back soon to take full advantage of this move down.
So that was the system update, now what happened in the news this week?
Inflation was the top business story of 2021, and it just kicked off its 2022 campaign with a bang. Consumer prices soared 7% in December, marking the largest yearly increase since 1982, the Labor Department reported this week.
The biggest culprits were shelter costs (aka rent) and used car prices.
• Shelter costs jumped 0.4% from the previous month and 4.1% on the year—their fastest annual growth since February 2007.
• Used vehicles, which have become the poster child for the current inflationary environment, have increased 37% over the past year.
• Gasoline prices have also spiked nearly 50% since December 2020, though fuel and energy costs dipped slightly last month.
Well, as the fed gets ready to raise interest rates to control inflation, it seems that the usual lull in home buying for the winter months is not set to be anything like a lull.
The median home sale price soared 16% annually in the week ending January 9, notching a new record of $365,000.
In the past month, 41% of homes sold above their listing price, up from 33% a year earlier.
So, the housing market is still smoking hot but is likely to cool somewhat when interest rates start increasing borrowing costs in the spring.
Keeping up with crypto… Kim Kardashian, Floyd Mayweather, and other celebs are being sued over promoting alt-coin EthereumMax as part of an alleged crypto scam.
The mysterious coin debuted in May claiming to “bridge the gap between community-driven tokens” and legacy crypto — but provided few details.
• Problem #1: EthereumMax’s misleading name. It has nothing to do with Ether, the second-largest cryptocurrency after Bitcoin.
• Problem #2: EthereumMax has crashed 98% since June, which has led to allegations it’s a “pump and dump” scheme.
Last year, crypto crimes hit a record $14B. About 100 new coins are created every day. So, scams are further motivating regulators in favor of more transparency and safeguards around crypto. Safeguards that surely will be coming.
Lastly, Goldman Sachs predicts the eurozone’s economy will grow faster than the US’s in the next two years. While Europe plans to invest billions in its nations this year, President Biden’s $1.8T Build Back Better Act is on ice for now.
And the market is closed on Monday for Martin Luther King Day, so it will be a short trading week next week.
That’s it from me, It’s Friday, time to down tools, thanks for watching, and bye for now.