2 min read

Is the Market Saying "Inflation"?

Call me "Captain Obvious," but if the current trends continue in coming days - oil, gold and small-cap stocks being the outperformers - then the stock market may be voicing rising concerns that inflation is about to be a much larger influence in the economy.
Is the Market Saying "Inflation"?

I'll keep this one short today.

Our recent premium stock pick (see "How We're Betting on $100 Oil") - added to the goodBUYs portfolio a few days ago - is off to a nice start, and for a good reason when you consider the headline above.

With that in mind, an interesting thing happened right about the time I posted yesterday's video about watching for "market signposts."

No sooner had I uploaded the video (in which I pointed out the relative weakness of the small-cap Russell 2000 index since March, versus the S&P 500 and Nasdaq) - when suddenly the R2K began outperforming them all the way into the closing bell.

So far in today's session, it's the same thing.

As you can tell from the chart below, the smallcaps, gold and oil are double and triple that of the major indexes on a percentage basis:

One, it shows you how quickly things can change in the markets.

Two, as I was uploading my video to YouTube yesterday afternoon, Fed chairman Jay Powell was wrapping up a highly anticipated speech.

He once again downplayed the prospect of rising price inflation in the US and global economies.

Call me "Captain Obvious," but if the current trends continue in coming days - oil, gold and small-cap stocks being the outperformers - then the stock market may be voicing rising concerns that inflation is about to be a much larger influence in the economy.

As individuals, we can't influence overall market trends. We don't even know what those trends really are except in the rear-view mirror.

Our crystal balls will always be hazy on these things - but at the beginning new investment trends, the market begins to quietly vote on new sets of winners and losers.

As investors and speculators, it's our job to keep careful watch, assess risks and rewards, and choose accordingly.

Best of goodBUYs,

Jeff