CNBC Daily Open: U.S. stocks don't seem bothered by inflation, ignore jump in retail sales

," said JPMorgan's Marko Kolanovic, who correctly called the March 2020 bottom. He warned that a sell-off in stocks could happen soon.It's as if investors aren't concerned about inflation and higher interest rates anymore. Strength in the U.S. economy — which would imply further rate hikes — has been translating into gains in the markets.

Yesterday I mentioned how sustained consumer spending might be propping up the economy. Indeed, the year-over-year increase in January's retail sales — 6.4% — is exactly the same number as the year-on-year rise in the consumer price index. It appears that the prospect of sustained economic growth is injecting optimism into stocks too. The Dow Jones Industrial Average edged up 0.11%, the S&P 500 added 0.28% and the Nasdaq Composite rose 0.92%.

Recent economic activity and market movement are forcing economists and investors to reconsider the effect of interest rates. The higher cost of borrowing typically slows economic growth by curtailing spending and increasing unemployment which, in turn, depress stocks.

This topsy-turvy relationship between higher interest rates and a pickup in economic activity is causing some investors, such as the founder of Satori Fund, Dan Niles, to predict that the Federal Reserve might raise rates higher than 6%. And if the price of everything keeps rising even then? It's hard to imagine what the Fed would do next.

How come no one challenged the notion that a terminal interest rate of 5.5% must be the death knell for US growth stocks (even after 6 mos of US inflation at only 1%. and even when China and Japan are injecting liquidity into the markets)? History rejects that “expert” mantra.

Money isn’t real anyway

Fox News 1 doesn't seem to be bothered with CNBC weak.ratings.

Business Business Latest News, Business Business Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

CNBC Daily Open: U.S. stocks don't seem concerned about inflation, disregard jumping retail salesJanuary's retail sales, like the months' jobs report and consumer price index, were higher than expected. But stocks don't seem concerned anymore.
Source: CNBC - 🏆 12. / 72 Read more »

CNBC Daily Open: U.S. stocks shrug off hot inflation numbersA hotter-than-expected CPI reading for January caused U.S. Treasury yields to increase. But stocks were remarkably resilient. Credit card debt is at the highest ever
Source: CNBC - 🏆 12. / 72 Read more »

CNBC Daily Open: U.S. inflation rose more than expected. But stocks held steadyA hotter-than-expected CPI reading for January caused U.S. Treasury yields to increase. But stocks were remarkably resilient. Inflation went down (slightly). The headline is misleading. Food prices went up 10 percent but the economy is doing just fine, lol Biden inflation is not going to go away until we fix our energy policy and get away from going green. But they don’t care about the average family trying to feed a family.
Source: CNBC - 🏆 12. / 72 Read more »