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The Latest from Our Blog

Investors Didn’t Stumble Over Inflation Last Week. Why Not?

Inflation – rising prices of goods and services – can be measured in a variety of ways. For example, the Consumer Price Index considers changes in the amount consumers pay for goods and services – a bag of carrots, a gallon of gas, or a doctor’s appointment. The Producer Price Index (PPI), on the other hand, considers changes in the amount producers – such as farmers, manufacturers, or physicians – charge for goods and services. Last week, the Bureau of Labor Statistics reported the PPI increased by 1 percent month-over-month in March 2021. It was twice the increase forecast by economists. On a year-over-year basis, the PPI was up 4.2 percent, which was the biggest gain since 2011, reported Reade Pickert of Bloomberg.

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Are Recessions Getting Shorter?

Zoom, zoom, zoom. Big economies tend to recover from recessions about as quickly as semi-trucks accelerate from stoplights. In other words, recovery tends to be slow. That may not be the case this time. “Everything in this economic cycle is happening at great speed. That is in part a reflection of the scale of economic stimulus, and not only from the [Federal Reserve]. One big fiscal package seems set to follow another. A $1.9trn package has barely passed and a $3trn infrastructure bill is mooted,” reported The Economist. Economic recovery has helped push stock prices higher, and concerns about inflation have pushed bond yields higher. Here are a few highlights from the first quarter of 2021:

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What Are Professional Asset Managers Thinking?

Bank of America recently published the results of its March global asset managers’ survey, which polls 220 professional investors responsible for about $630 billion in assets, reported Julia La Roche of Yahoo! Finance. Many of those surveyed were optimistic about 2021. During the next 12 months: • 91 percent of those polled expect the economy to strengthen (that’s a record high) • 89 percent anticipate global profits will improve • 52 percent expect value stocks to outperform growth stocks

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Investors Had A Lot To Be Enthusiastic About Last Week

Investors Had A Lot To Be Enthusiastic About Last Week Major stock indices in the United States soared, finishing the week higher and setting new records along the way, reported Al Root of Barron’s. There was plenty of good news to fuel investor optimism: • The $1.9 trillion American Rescue Plan was signed into law. The plan provides $1,400 payments to most Americans. It also delivers child-tax credits, health-insurance subsidies, and extends unemployment benefits into September, reported NPR. Funds also were made available for schools, states, and vaccination efforts, as well as tax relief for people receiving unemployment benefits.

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