Animal Spirits Podcast Extreme Cost Cutting (EP.266)
Jul 20, 2022
Inflation is on everyone's minds, with an exploration of how it impacts consumer behavior and stocks as a hedge. The hosts discuss the surprising downturn in travel and entertainment stocks, questioning their market influence. The competitive streaming landscape sees Netflix shining amidst rivals' struggles. They also dissect home appraisals and the evolving real estate market. Finally, the conversation touches on the challenges faced by buy now, pay later companies and rising consumer goods costs, suggesting a tumultuous economic future ahead.
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Big Stock Losses
- The biggest seven stocks in the market lost $3.1 trillion in the first half of 2022.
- The top 25 stocks account for over 60% of the S&P 500's total losses.
Peaking Inflation?
- Inflation may be peaking as commodity prices and wage growth slow.
- The true test will be if inflation continues to fall in the coming months.
Deflation Risk
- The risk of deflation is higher than prolonged inflation, unlike the 1970s.
- Deflation, however, would likely trigger a recession and job losses.