Investors are wondering why stocks are down today and we’ve got the answer in our midday market update for Tuesday.
The big news today that has investors shaking comes from the Consumer Price Index for August 2021. People have been pouring over the data, which shows significant increases in prices year-over-year.
Let’s dive into that data below to understand why traders aren’t happy about the CPI report.
- The price increase for all items increased an average of 5.3% over the last 12 months.
- Breaking that down, we saw food prices increase 3.7% YoY.
- Energy costs also surged 25% from the same time last year.
- Gasoline in particular jumped much higher with a 42.7% increase since August 2020.
- When looking at all items not including food and energy, consumer prices were up 4%.
- The price for used cars and trucks also saw a 31.9% jump from the same period of the year prior.
It’s also worth pointing out in our midday market update that concern about rising prices has spread online. As of this writing, #inflation is trending on Twitter (NYSE:TWTR) with users discussing the report and other factors.
Let’s take a look at what some people are saying about inflation on Twitter.
Don't be misled by media claiming disruptions from #Covid that impact supplies and labour are causing #inflation b/c the real cause is abandoning #gold and the discipline it imposed on #centralbank #money printing. Gold today buys the same amount of #energy as 70yrs ago. pic.twitter.com/Kl0qHcDhRx
— James Turk (@FGMR) September 14, 2021
Actually, if you ignore food, cars, housing, and most other things that are going up, #Inflation remains quite low! No reason to worry…
— Egon von Greyerz (@GoldSwitzerland) September 9, 2021
Producer Price Inflation is above 10% for the first time since 1981 on a finished goods basis (the main measure used until 2011). On a final demand basis, it's 8.3%, highest since inception in 2011. Either way, it's worryingly high. pic.twitter.com/vIYCRAjd79
— John Authers (@johnauthers) September 10, 2021
Gold traders still don't understand that rising bond yields reflect soaring budget and trade deficits and higher #inflation, not stronger economic growth. To keep a lid on long-term rates, the #Fed will expand the QE program it's talking about tapering. This is bullish for #gold!
— Peter Schiff (@PeterSchiff) September 7, 2021
Imagine your employer said you would be receiving a permanent 5.4% pay decrease. How upset would you be?
— Zev Mintz (@ZevMintz) September 13, 2021
With consumer prices rising, there’s sure to be more talk about inflation rates over the next few months. That could lead to an expensive winter and demand increases during the holiday shopping season. We’ll have to wait and see how this plays out for the stock market until then.
Traders looking for more stock market news today will want to keep reading!
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.