September 13, 2022, 12:16 pm EDT
Stubborn Inflation
Stubborn inflation Consumer Price Index (CPI) stayed at 8.3% for the August reading. Visually, there is not much improvement when looking at the chart. Although the crude oil price came down a bit, it does not help the 40-years high level of inflation.
The stock market returned most of the gains accumulated in the past 4 sessions by falling -840 in Dow Jones and -3.8% in the Nasdaq index.
Not only is the drop in price actions, but the previous mega leaders also suffered badly that they are nearly making a new low: META, GOOGL, NVDA.
Definitely, it is a signal that a new low is coming on the way.
All-red color in the industry map also shows that trouble is widespread almost everywhere. Only a few agriculture-related stocks are able to hold: CVTA, MOS, CF. Most likely, it forecasts a food shortage or higher food prices due to wars, inflation, and extreme weather.
It would be reasonable to expect a much worse sell-off in the next few months. Thus, staying defensive in the portfolio is the best strategy.
