Posted on 05/22/2021 6:34:09 AM PDT by blam
Strong economic growth in the services and manufacturing sector is pushing prices up at an “unprecedented rate,” surveys of executives in both the manufacturing and services sector indicated Friday.
The flash reading of the IHS Market U.S. composite purchasing managers index unexpectedly jumped to a record high 68.1 in May from 63.5 in April, according to survey data released Friday. Analysts had expected the index to move sideways or slightly downward after hitting records in April.
The manufacturing component went from record high to new record high. The services portion was expected to see a modest gain after a stunning upward leap in April. Instead, it exploded higher again, rocketing from a score of 64.7 to 70.1.
“Growth was driven by the fastest service sector upturn on record,” said Chris Williamson, the chief economist for IHS Market.
But all this growth coming amid supply-chain chaos and shortages is also spurring inflation.
“The May survey also brings further concerns in relation to inflation, however, as the growth surge continued to result in ever-higher prices growth surge continued to result in ever-higher prices. Average selling prices for goods and services are both rising at unprecedented rates, which will feed through to higher consumer inflation in coming months.”
Another inflationary signal from the report came in the form of reports from manufacturers noting higher order volumes from clients due to material shortages and efforts to stockpile amid rising costs.
Any reading in the IHS PMI indexes above 50 indicates improving conditions.
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(Excerpt) Read more at breitbart.com ...
Inflation Nation: Home Prices Rise At Record Breaking Pace To All-Time High
Not a great time to be “in cash”
“COVID didn’t crush the economy. Government did.”
I just retired. Where should cash go? The markets are inflated, everything’s inflated.
If you think it is going to crash hold your cash. If you think the government is going to keep printing money you should invest it. Buy electric utility stocks or something if you are retired. 10 years from now cash will be worth less than half what is now. You have to keep up with the rate of inflation or your savings die a slow death.
That’s The $64,000 Question right now.
Or look around and buy investment property. Something you can fix up and do most of the work on yourself. I know real estate is pricy now. Find the right deal. A solid asset for your portfolio.
“I just retired. Where should cash go? The markets are inflated, everything’s inflated.”
You need a financial adviser. Leaving your money in cash will guarantee it will lose its purchasing power while investing in the markets even at these levels will act as a hedge against that very thing.
The only recommendation I will make is to keep a minimum of 6 months expenses in a cash account.
Hmmmm....... Will my clients allow me to raise my fee?
What business are you in?
I was having an FR discussion about this yesterday. I am looking into I Bonds. Do a search on I Bonds.
Barron’s has a recent article on what to invest in now. Cash is not the place to be, IMHO. I am in a value stock, and I have cleaned up in the past 6 months.
There are extremely few stocks to invest in presently, according to Morningstar, few 5 star stocks. I would like to diversify, but I don’t know what would be better than the 5 star stock I am heavily in now.
Maybe I will invest in a couple of foreign stocks.
I don’t think there will be a crash because the government will continue to print money.
I understand the “security”. I do not view bonds as a hard asset. I would rate them and their performance as secure as my future social security..... but that is just me. You are addressing the issue though... retires have to have a portion of their retirement in a vehicle designed to keep up with inflation. That percentage is likely different for each retiree.
I agree with you.
Look at the defense industry. Raytheon, Lockheed Martin and such. When you invest in the defense industry over time you always win. It is like buying into the government.... the military.
The democrats’ goal was to crush Donald Trump’s soaring economy in 2020, and they accomplished it. From the first second of the epidemic they saw their chance: bring the country to its knees and spread misery, then blame it on Trump.
This inflation is a direct consequence of it, and sleepy joe has full responsibility.
When our energy resources are prohibited from being used which if fully developed would turn out to be a source of income when exported such results should be expected. Those who support such decisions should be impeached beccause of the serious damage being done to the economy
Yep. I have seen wholesale prices in some items that exceed the old retail prices of just a few months ago.
Our little grocery store just changed their source for beef and everything went up by at least a dollar per pound. Ribeyes are $18/lb now. Cheapest ground beef $4.99.
“ I just retired. Where should cash go? The markets are inflated, everything’s inflated.”
Well, don’t rely on advice from posters on FR, especially me. Ask your friends who they work with as a financial advisor and talk to the person whose name comes up 2 or 3 times.
That said, some things that are a good idea (and diversification is key) include:
ETF’s or Mutual Funds that do well in a rising interest rate/rising inflation/rising dollar environment. They could include floating rate bonds, commodity based funds & energy funds.
Investments that swim downstream with the current insane Marxists plans. They could include Warren Buffet’s fund (look at the B shares), funds that invest in infrastructure and building up the electrical grid for electric cars.
Investments that will benefit from the COVID recovery, that invest in things consumers buy or travel & leisure and transportation funds.
Index funds that mirror the Dow, S&P 500, Nasdaq and look for ones that offer downside protection (buffered) with a bit less upside potential.
For God’s sake learn about interest rate risk before buying high quality long term bonds.
I hope that gives you food for thought… it if you are asking the question you need good professional help.
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