Has Inflation Peaked?

While the mainstream argues over whether or not we’re in a recession, people are still having inflation drain their pockets. That means a grim economic picture in the short term. Here’s a rundown of recent news stories that will likely shape the economic outlook in that time so you can get a sense of what you need to do as an investor. 

American watches as inflation increases, has it reached it's peak?

Since last week:

The jobs numbers were released on Friday. 372,000 jobs were created in June across a mix of industries. This has been cause for celebration across the mainstream, but the truth is that it doesn’t mean the economy is out of the woods yet. Inflation is still rampant, consumer confidence is still low, the real estate market has slowed, and the specter of recession still haunts everything. Despite what you may be seeing in the headlines, now isn’t the time to shift away from investing defensively. 

Recession Talk Surges in Washington

It wasn’t long ago that our nation’s leaders swore recession wasn’t inevitable. That kind of talk seems to be fading away as the reality of it settles in. Even with positive jobs numbers this past week, inflation is still climbing and consumer sentiment is still negative. The Fed is still set on raising interest rates, which will likely only make things worse. Long story short, the environment we’re in is here to stay for at least the next few quarters, so investors need to be defensive to avoid stocks that could still fall much farther. 

Tesla’s Gigantic Batteries

Over the past few years, Tesla has been building out its Megapack projects. These are installations made of batteries the size of shipping containers. And they are designed to replace plants that sit idle for much of the day but provide extra energy when the grid can’t keep up. In the push for more green energy, these are showing what the future of energy storage and distribution will look like. Tesla has recently ramped up production of these facilities, meaning it’s something we’re going to see more of as the US undergoes a revamping of its energy infrastructure. 

Korea Goes Nuclear

South Korea is looking to expand nuclear power generation to 30% by 2030. The country’s new government is prioritizing not just carbon neutrality but energy security, and this move will bring them closer to both. It’s a stark move that is, in effect, a reversal of a phase-out policy from the old administration, and it’s part of a larger trend of governments all over the world making similar moves. All of this means that uranium demand is going to climb. 

Commodities and Inflation

Has inflation peaked? That’s the hope with a recent slide in the prices of various commodities. Oil, precious metals, corn and wheat, natural gas, and others have seen their prices slide somewhat recently. Even though they are still historically high, some are seeing this as a sign that inflation is starting to reverse. There’s no telling exactly what the next few weeks hold, but commodity demand is still high and supply low, which means investing in the right commodities is a sure way to protect your wealth.

What to Look For

With the jobs numbers out, you might see the mainstream try to play this up and distract from the bigger picture. For good measure, they might throw in the fact that gas prices are in decline. It’s not like there’s an election coming up or anything, right? 

Reality is setting in and economists are now saying that GDP for Q2 may have shrunk instead of grown. The official numbers won’t be out for a few weeks, but the broad sentiment will dictate the mood long before that. Look for the Fed to continue to flounder, deflect, and try to explain it away while July 28 approaches.

Ryan Stancil

Ryan Stancil
Editor, Daily Profit Cycle