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I Went Grocery Shopping Today. Has Inflation Peaked?

I Went Grocery Shopping Today. Has Inflation Peaked?

June 20, 2022

Good morning.

I went grocery shopping this morning. I shop once a week for Renee and me. I spent $155. This was down from the two prior weeks of $165 and $178. (Of course, these amounts do not include beer!) That got me thinking - has inflation peaked?

So ran a few simple 4-hour charts that may reflect some element of inflation. Here is what I learned:

VTIP. Vanguard Inflation-Protected Securities. This has been falling since March.
VEGI. Global Agriculture Producers. Falling since the end of April.
MOO. Agribusiness. Falling since April.
DBC. Commodities Index. Falling since mid-June. MACD is about to go negative at 0.00.
OIL. Falling since mid-June. MACD just turned negative.
WOOD. Global Timber. Falling since May and broke resitance.
CARZ. Automotive Index. Falling since the start of the year.
STGF. A new stagflation ETF from Merk. Falling since mid-June.
PFIX. Simplify Interest Rate Hedge. This is dropped a bit since mid-June, but less than others.

You can see a number of the assets I use to track inflation have moved lower - some over the past months, some over the past week.

Could it be we are in a recession? I suppose so but with unemployment low we do not meet all the requirements. Time will tell. Looking at all of this though, my sense is we have a short-term inflation peak and that markets are going to rebound over the coming months. If and when that happens it will show up in our V2 Model and we will look to get long again.

Now? I'm off to the beer store!

For the year V2 is outpacing the SP500 by over 20%!

Our V2 Model tracks over 120 asset class ratios on various time frames to assist us in deciding how and when to allocate our holdings. No single indicator, chart, or list gives market clarity. They each give a point of view that we factor into our model. We do not forecast. We follow the math. It has led us to remarkable long-term performance.

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Distance=Victory

Chris

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