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Hi Reader, here's what you need to know for October 4th in 3:07 minutes.

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Today's big stories

European inflation hit a 13-year high last month
The results of our survey are in, and your dwindling optimism suggests the stock market rally might actually have further to go – Read Now
Investment banks have posted record fees this year, thanks in large part to a record-breakling year for dealmaking

Something Something Inflation

What’s Going On Here?

Data out on Friday showed inflation in Europe surged to a 13-year-high last month, and we can probably just go ahead and copy/paste at this stage, right?

What Does This Mean?

Europe’s story is much the same as everyone else’s: the same supply chain disruptions have been forcing the region’s companies to pass higher costs onto customers, and the same energy shortages sent gas prices to record highs on Friday. That drove consumer prices up 3.4% in September versus the year before. And even if you strip out unstable costs like food and energy, prices still rose by 1.9% – the biggest jump in the metric since 2008. This isn’t going away either: energy prices alone are set to climb even higher after China said last week that it was willing to go to whatever lengths necessary to secure supplies for winter.

Why Should I Care?

Zooming in: Do you even, like, need a salary?
Germany is in particularly deep schnitzel: inflation in Europe’s biggest economy hit its highest level for nearly three decades, with prices up 4.1% on the year before (tweet this). So, uh, you’d think German workers might’ve given a little more thought to macroeconomic trends before going on strike to demand fair pay. Economists are worried that if wage increases spread across the region, it’ll push up prices even more and magnify the problem.

The bigger picture: A shortage here, a shortage there.
Another day, another shortage – this time silicon, which has fallen victim to yet another production cut in China as it tries to curb power consumption. That’s caused the price of the second-most abundant material in the world to skyrocket 300% in the last two months. And given that silicon is used in everything from microchips to concrete, that could prove costly for companies and consumers alike.

You might also like: Five ways to protect your portfolio against rising inflation.

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Analyst Take

Your Glass-Half-Empty Outlook Might Be Just What Stocks Need

Andrew, Analyst

What’s Going On Here?

You might remember that we asked you to chime in with your views for our Casual Investor Survey last week.

Well, the results are in.

The overarching sense is that you’re suddenly a lot less confident in economic growth, company earnings growth, and stock market performance – though that in itself might be a good omen.

Meanwhile, you’re all suddenly much more wary of China than you are of the pandemic, which perhaps isn’t surprising given all the doom-and-gloom headlines recently.

It’s all in today’s Insight: how you guys are feeling about the global economy, stocks, bitcoin, NFTs, and more, and how you can use that to inform your investment decisions this quarter.

Read or listen to the Insight here

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