6-Chart Saturday (6/12/21)

By Charlie Bilello

12 Jun 2021

6 charts from the past week that tell an interesting story in markets and investing…

1) Consumer Prices Surge

US consumer prices rose 5% over the last year, the highest increase since 2008. Core prices (excluding food/energy) rose 3.8%, the fastest pace since 1992.

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The US is not alone in seeing rising prices, though its increase is the highest among developed nations…


2) Central Banks Remain Easy

Meanwhile, the Fed continues to maintain the easiest monetary policy in history (0% rates and unending QE), and has stated it will continue to do so for years to come. The result: a Real Fed Funds Rate (Fed Funds minus inflation) of -4.9%, the lowest level in the last 40 years.

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Most central banks globally are doing the same, reluctant to reverse their emergency policy stances from last year even in the face of rising inflation.

3) Meme Volatility Up, Market Volatility Down

The incredible swings in meme stocks continued this week, with Clover Health ($CLOV) more than tripling from last Friday’s close before reversing course.

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Fast food chain Wendy’s ($WEN) was also hyped on Reddit, leading to a 30% surge higher before giving back much of its gains.

Interestingly, volatility in the overall market (S&P 500) hit its lowest levels since the start of the pandemic, with the $VIX now below 16. That’s down from a peak of over 80 last March.

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4) Covid Down ➝ Travel Up, Oil Up, Gas Up

Covid-19 numbers continue to improve, with new pandemic lows in hospitalizations again this week. From their peak in January, hospitalizations are down 88%.

As a result, travel continues to normalize at a rapid pace, with 1.8 million air travelers per day over the last week. That’s the highest we’ve seen since March 13, 2020.

Increasing demand continues to push up the price of Crude Oil, which closed above $70 a barrel for the first time since October 2018.

With the summer travel season set to begin, gasoline prices in the US are already at their highest level since 2014 ($3.13 per gallon).

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5) High Yield Becomes Low Yield

US high Yield bonds are now yielding 4.08%, the lowest level in history.

What are high yield bonds? Read our recent post here.

6) $18,000 for “Air and Spirit”

We’ve seen many absurd things in the past year, but this one may top them all. An Italian artist (Salvatore Garau) recently sold an invisible sculpture for over $18,000, saying “you don’t see it but it exists; it is made of air and spirit.”

An Italian artist sold an invisible sculpture for over $18,000 and had to give the buyer a certificate of authenticity to prove it's real.

And that’s it for this week. Thanks for reading.

Have a great weekend!


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Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. For our full disclosures, click here.

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