The Pulse on the Economy and Capital Markets: September 12─ 16, 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.

Related resources:

• 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

Disclosures

Investment advisory services are offered by Aprio Wealth Management, LLC, a Securities and Exchange Commission Registered Investment Advisor.  Opinions expressed are as of the current date (September 19th, 2022) and subject to change without notice. Aprio Wealth Management, LLC shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, the information, data, analyses or opinions contained herein or their use, which do not constitute investment advice, are provided as of the date written, are provided solely for informational purposes and therefore are not an offer to buy or sell a security. This commentary is for informational purposes only and has not been tailored to suit any individual. References to specific securities or investment options should not be considered an offer to purchase or sell that specific investment.

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