😱 Why Inflation Might Be Roaring Back

Plus why oil prices are about to collapse, and more

November 19, 2024

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Happy Tuesday! Inflation has been trending down for months - good news, though that hasn’t made things at the grocery store any cheaper. Just slowed down the pace at which prices rise. But here’s why inflation may be about to roar back to life - and how investors need to adapt. Also, why oil prices are about to collapse.

—Josh Enomoto

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MARKET RECAP

Yesterday: Markets regained some of their upward momentum, with TSLA especially leading the way after word came out that President-elect Trump was going to look favorably on the EV company’s autonomous vehicle plans.

On Our Radar: US housing start numbers will show how well construction, a pillar of the economy, is doing. Today’s earnings from crucial companies such as Walmart and Lowe’s will be another signal for the health of the economy.

TOP STORY

Goldman Sachs, the world’s second-largest investment bank, just released a new report predicting that inflation may be about to make a comeback. Long trending down, one event coming up could trigger a new surge in rising prices.

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FIVE ZINGERS

Canceled Ride: Ride-sharing giant Uber slipped uncharacteristically, a potential victim of election-related drama. While the market has generally responded positively to the ballots, a new regulatory paradigm could impose a significant impact on the Uber’s main business.

Fever Pitch: MicroStrategy continued its remarkable ascent, thanks largely to its unofficial status as a proxy for decentralized digital assets - and the upcoming changing of the guards at key regulatory agencies.

Blunted Momentum: With shifting public sentiment, multi-state operators in the cannabis sector have grown significantly. But with a new administration comes new policies and that may have repercussions for the industry, and for consumers.

Reality Check: Although Boeing may be an American industrial icon, it hasn’t been able to benefit from this year’s remarkable bull run. However, a recent key decision appears to have supporters in the market.

Sound Advice: Elections can be stressful. However, financial advisor Suze Orman urges people to not lose sight of their goals, regardless of their personal political preferences. Instead of worrying about the drama, she recommends people focus on this one thing.

ONE FOR THE ROAD

Editor’s Note: Every week, Benzinga Edge members receive the Insider Report. It’s a rundown of what to expect from the markets in the week to come, which sectors are outperforming and why, and most importantly, a selection of hand-picked stocks that are poised to move up because of that week’s trends. Here’s a sneak peek at one piece of the latest Insider Report’s sector forecast:

It's not just potential spending reforms that could send long-term interest rates lower over the next several months. I'm eyeing a potentially massive breakdown in the energy market over the next few weeks too. This could have a major impact on inflation expectations.

I wouldn't be surprised if this breakdown I'm watching for coincides with President-elect Trump's appointment for the Department of Energy. I think most people at this point expect this incoming administration to be one that is open to more drilling in the United States.

Basically, if crude oil collapses down to the $45-50 zone like I'm expecting, it will send inflation expectations tumbling – but only near-term. Let's be real – Americans will spend the savings, and in the long-run, will give us the setup for a return of inflation towards the end of 2025.

To keep reading and to find out how investors can prepare for this coming oil price collapse, sign up for Benzinga Edge here.

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