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Before you Trade Today: Know the Economic Calendar! Also See This Weeks Most Anticipated Earnings (Note: Red Indicates an Earnings Loss [Not Miss] Consensus), & Yesterdays Insider Buys.

INSIDER BUYS: (NO, THE 15TH IS NOT A TYPO)

TODAYS COMMENTARY Get a Cup of Coffee & Enjoy Catching Up! If you aren’t reading this daily you are missing out on a wealth of information that could prevent unforced & unnecessary trading errors.

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INFLATION UP FRONT: You are hearing a lot about inflation topping off in the news. It’s all smoke in mirrors. The change in rate of inflation from March to April 2021 was a massive 1.6% jump. So as long as a similar jump does not happen in April 2022, the YoY inflation rate will decline. It’s smoke & mirrors folks. The average month to month YoY increase in inflation over the last 12 months is roughly 0.5% per month. If inflation jumped an additional 0.5% MoM in April, could we assume 9% inflation given the fact that inflation for March came in at 8.5% YoY? No, because a 0.5% increase MoM this year can’t keep up with the 1.6% jump MoM last year. The rate of inflation that you would read in such a scenario is roughly 4.8% YoY (8.5+0.5-4.2=4.8%). That simplistic math is misleading though, because each increase in inflation given the dollar frozen in time is worse than the increase prior. So a 0.5% increase in inflation today is much more than a 0.5% increase in inflation a year ago when it comes to affecting real purchasing power.

What you will need to watch out for is June-September 2022, where the smoke & mirrors will somewhat clear up. June-September 2021 inflation was stagnant at 5.4% YoY & not moving much month to month. Therefore, the more things cost month to month this year during the Summer of 2022, the more it will reflect an increase, not decrease, in inflation YoY. To give you an idea of how serious inflation is, 5% YoY inflation for a sustained 4 years without an increase or decrease in inflation rate would mean a 21% price increase in just 4 years … which means you just lost 1/5th your purchasing power unless you got a wage increase. Combine this with rising interest rates & “Houston, we have a problem.” Combine this with offloading the Fed balance sheet, which sucks money out of the economy, & the problem gets worse.

If inflation next month comes in the range of 8%, it would mean that an item that cost $100 in 2020 would cost $112.5 today!! That would be a 12.5% increase in 2 years. But it isn’t going jump that high (8% YoY), because of the March-April difference from the year prior, though if it does we are in serious trouble. It is far more likely that over time consumers will be slowly priced out of the market & prices will necessarily need to fall for businesses to remain competitive … even if is means a loss, or, a lower profit margin than historically realized. Now you can see why I’m having issues adding picks to the BUY LIST. Nevertheless, the 8.5% inflation for March implies you are paying over 11.1% more for goods than TWO years ago. If prices remain the same in April as they were in May (possible but unlikely), the CPI YoY should come in at around 6.9-7%. So once again the YoY inflation rate may decrease, but the prices will continue to skyrocket beyond historical norms.

OTHER NOTES: Lots of housing data this week & the War in Ukraine continues. Keep an eye on consumer spending & behavior as inflation bites & pay close attention to the various bullish & bearish sectors amid earnings season. Personal income & Personal spending Friday next week (Not this week) have the potential to seriously move markets (See Economic Calendar Above).

Significant News Heading into 04.18.2022:

• Asia stocks mixed as investors react to Chinese economic data

• S&P 500 futures slip ahead of a huge week of earnings reports

• 10-year Treasury yield rises to highest level in more than three years

• China’s first quarter GDP beats expectations to grow 4.8% year-on-year

• China’s Covid policy locks down a city three times the size of New York

• How Russia’s war is cutting global auto production

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PAID CONTENT IN THE PAYWALL BELOW:

• 11 Stocks near/at/above the Buy Zone (Waiting to Swing).

• 1 Options Strategy

• 25 Stocks on the Price Based Assessment Watchlist

• 5 Stocks on the Stocks Under $20 List (Read the Warning/Disclaimer)

• 6 Stocks on the Highly Speculative Highly Volatile Small Cap List (Read the Warning/Disclaimer)

• 4 Stocks on the short possibilities list

👉CLICK HERE TO SEE THE DETAILS OF EVERY STOCK ON THE BUY LIST (AND SEE THE PRICE ASSESSMENT BASED WATCHLIST / THE STOCKS UNDER $20 LIST & THE HIGHLY SPECULATIVE LIST)

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