Investor hopes around “immaculate disinflation” may be coming undone
Investor hopes around “immaculate disinflation” may be coming undone: Tom Essaye Quoted in MarketWatch
Are stock-market investors losing faith in ‘immaculate disinflation’?
That’s a sign that investor hopes around “immaculate disinflation” may be coming undone, said Tom Essaye, founder of Sevens Report Research, in a Monday note.
While the S&P 500 rallied 1.58% last week, the small-cap Russell 2000 fell 1.25%, the Dow industrials lost 0.54% and RSP (S&P 500 equal weight) declined 0.53%. “The reason the ‘rest’ of the market declined last week was that while disinflation is occurring, it may not be ‘immaculate’ and that’s a potential negative for stocks.,” he wrote.
“Here’s the point: If inflation falls because growth is slowing, that’s not an automatic positive for stocks anymore and we saw that this past week as sectors and stocks that weren’t attached to AI declined, despite the drop in CPI and rising Fed cut expectations,” he wrote.
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