The Pulse on the Economy and Capital Markets: September 12─ 16, 2022
September 19, 2022
At a glance:
- Many experts expected the Consumer Price Index (CPI) to decline due to weakening gas prices — but to their surprise, the report showed a positive number, which signifies that inflation is increasing.
- Excluding food and energy, inflation increased 0.6% last month, or about 7% annualized. This trend has investors worried that the Federal Reserve will have to raise interest rates faster and keep them higher for longer.
- Stocks, bonds, commodities and cryptocurrency markets were down across the board last week in response to this news.
- Despite this performance, US markets and bitcoin are still higher quarter-to-date, and so are high-yield bonds, as they are typically less sensitive to interest rates compared to other types of bonds.
- The driver behind higher inflation is the services sector, most notably with the costs of housing (“shelter”) increasing. However, the pressure could start to reverse as soon as the beginning of next year, as rental growth rates peaked in the first quarter.
- In terms of industry news, we’re reading about two competitive acquisitions in the digital and real estate world, as well as key insights from Apartment List’s latest rental report. Plus, we’re learning about the negative impact the climate crisis could have on California’s lucrative wine industry.
- Adobe snaps up Figma for $20 billion, taking out one of its biggest rivals in digital design
- GIC, Oak Street to acquire Store Capital (“Monster” net lease REIT) for $14 billion
- California’s $45 billion wine industry faces climate peril
- Apartment List’s national rent report – growth rates are decelerating
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About the Author
Simeon is the Chief Investment Officer of Aprio Wealth Management and the Director of Aprio Family Office. Simeon brings two decades of professional investing experience in publicly traded and privately held companies, as well as senior-level operating and strategy consulting experiences.