Cash in a Minute for the Week Ending April 16, 2022
Every Saturday I recap “news you can use” from the week: a handful of short quotes from major (and often expensive) news sources, so you can stay up to date on the news that affects your money without spending a dime and in less than a minute.
Here are headlines and quotes from select money stories this week. At the end, you’ll find my take on the news.
Consumer prices rose 8.5% in March, slightly hotter than expected and the highest since 1981 (April 12, CNBC):
The consumer price index, which measures a wide-ranging basket of goods and services, jumped 8.5% from a year ago on an unadjusted basis, above even the already elevated Dow Jones estimate for 8.4%.
Excluding food and energy, the CPI increased 6.5%, in line with the expectation.
Markets Are Trading Like Inflation Has Peaked. That Seems a Bit Premature. (April 12, Barron’s):
“The good news is that price pressures have begun to ease and will probably continue to do so,” wrote Aneta Markowska and Tom Simons, money-market economists at Jefferies, in a Tuesday note. …
None of this means that inflation will recede back to the Federal Reserve’s 2% target, however. …
“The Fed is a long way away from claiming victory and will have to remain in inflation-fighting mode,” the Jefferies economists said.
US Producer Prices Jump 11.2% From a Year Ago, the Most on Record (April 13, Bloomberg):
Excluding the volatile food and energy components, the so-called core PPI increased 1% from a month earlier and was up 9.2% from a year ago. That stands in contrast to the latest consumer price report which showed a softening in the pace of core inflation.
Global Trade Hit by Ukraine War, China Lockdowns (April 13, Wall Street Journal):
Global trade stumbled in March, tripped up by accelerating inflation, war in Ukraine and Covid-19 lockdowns in China, adding to signs the world economy is entering a rough patch as policy makers battle to sustain growth. …
While the US appetite for imports has held up, the economists said, inflation and rising interest rates are likely to bite into consumer spending.
My take on the week
Another week, another ride on the stock roller coaster.
While the Dow Jones Industrial Average ended the holiday-shortened week about where it began, there were plenty of gut-wrenching highs and lows along the way. The tech-heavy Nasdaq fared a bit worse, ending the week about 150 points lower than on Monday.
And speaking of tech-heavy, if you’re like me, you probably are. For decades now, I’ve been a heavy investor in all things tech, from Apple to Intel to Qualcomm. This strategy has rewarded me most handsomely.
Until now, that is.
While I’m still a big believer in tech, it’s not the right place to be when rates are rising.
That’s because the value of a stock is essentially determined by the present value of its future earnings. As rates rise, the present value of those earnings falls, and the stock along with it. In short, rising rates hurt growth stocks, which is what technology stocks are.
The solution? Sell and hope like heck you’ll know when to buy back in; buy stocks that tend to do better in this environment, like profitable health care, oil, insurance, agriculture and select mining companies; or steel yourself for a decline in net worth.
I’ve done a bit of all three. I’ve taken some profits, and invested in some companies that tend to act well in this environment. That doesn’t mean, however, that I’m fully insulated, so I’m now resigned to watching my net worth shrink for a while. It’s not fun, but that’s the deal when you’re a stock investor.
Check out my podcast
I hope having these news notes makes your life easier. Want something else that’s concise and impactful? Check out my weekly “Money!” podcast. They’re brief, casual conversations with news recaps, as well as tips and tricks to make you richer.
You can listen right here on the Money Talks News website, or download them wherever you get your podcasts. Just look for Money! with Stacy Johnson.
Check them out: You’ll be glad you did!
I founded Money Talks News in 1991. I’m a CPA, and I have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.
Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.