저자: 미상 · 외국인
요약 보기
더이코노미스트의 인플레이션 기사를 바탕으로 물가 둔화 가능성을 논의한다. 낙관론(CPI 3.8%, 기대인플레 하락)과 비관론(고용·JOLTS 과열, 연준 과잉긴축 우려)을 대비하고, M2 통화량이 인플레 선행지표로 유효하다고 주장한다. 월마트·홈디포 실적에서 재량소비 둔화를 확인하며 필수소비재(스테이플)를 피하고 가격결정력 있는 주식을 선호한다. 다만 연준의 과잉긴축으로 인한 변동성 큰 회복 가능성을 경계한다.
다듬은 글
The Economist just put out a phenomenal piece on inflation we're going to touch on exactly what's in this piece and we're going to talk about how this relates to the Walmart and Home Depot earnings calls what did they have to say and uh their numbers where are people spending money where are people not spending money and is it possible that the tool that we could use to predict inflation is something that most economic forecasters have actually not been using and maybe if we start using it we could actually see the true expectations for inflation that are potentially a lot more accurate than what we've been using because who remembers of course oh don't worry inflation will be transitory now don't worry the transitory folks might still end up winning the war but so far they've mostly and highly embarrassingly lost the battle but there's a particular tool that might give us an idea of how inflation is going to act in the next few years but first let's get started with this piece from The Economist absolutely fantastic piece here lots of investors think inflation is under control not so fast as the February it says this uh edition of the this week's edition of The Economist in 2023 it may yet do the same to the real economy that is the average economic forecaster thinks that a recession in America is essentially a definite outcome when economists write the history of the post-pandemic era the Resurgence of inflation and Central bank's battle with it will be a defining story they say fantastic but where's the interest where are the arguments well you've got two sides you've got the optimistic side the pessimistic side and then the side of data that the economist provides and it's fantastic let's look at the Optimus first here so the optimists say they point to a growing pile of evidence showing that out of 25 economically developed countries uh 25 out of 36 of those countries monthly data is showing headline inflation is falling and the good news has been coming in for months forecasters had actually been overestimating how much inflation is potentially coming in for January and February and the three months to January America's consumer Prices rose at an annualized rate of just 3.8 percent the lowest reading in two years according to the last CPI report we got on v-day and that's not to be confused with v-shaped recovery day it's uh Valentine's Day uh this time last year central banks were thinking very different thoughts we didn't actually have a falling inflation or inflation moving at 3.8 percent instead we had inflation expectations that were highly unanchored and the worst was still clearly ahead of us with terrible inflation reads in the summer followed by some surprises in the fall and that really led the Federal Reserve to embark on this incredible tightening cycle however an interesting note here researchers at the Federal Reserve Bank of Cleveland a morning consult and another University here published a a new piece on inflation expectations together and they find that between August and December the median expected rate of inflation across rich countries has fallen by about a percentage point now unfortunately that started Rising recently based on bond market signals that yes inflation expectations had nicely fallen in the last three months of the year in fact you could see that here I hide myself from the screen here you can see the last three months of the year yes inflation expectations had been falling but they're starting to rise again so I think it's worth noting that in in the context of this economic Economist article here uh but really the argument here is that hey look we're starting to potentially see core expectations of inflation fall below levels that we had in pre-pandemic America and research suggests that searches for inflation are falling on Google substantially in that really inflationary pressures on on uh any sort of economic modeling are showing massive inflection points that inflation is trending down that's sort of the the optimistic argument right and the optimistic argument I believe is buffered by the fact that most company earnings calls tell you yeah look we had to raise wages and prices in 2022 but people are becoming more price sensitive we think most of the Embers of inflation are going to be gone by the second half of 2023 the labor supply has increased substantially and so on now unfortunately you've got some other information here as well for example here you have ultimately uh this this idea uh that uh financial markets might be overly enthusiastic about inflation falling and that's because of this fear that the labor market is still overly tight when we look at things like the jolts report it's exactly what we're getting very hot jobs report very hot a jobs opening and labor turnover survey for January some arguments are being made that hey these are just seasonal implications from January and don't worry these numbers are going to go away in February great but that leads to a lot of uncertainty in February between now and obviously March and puts more pressure on the more uh the the data reports we're going to get in March but the concern is you're starting to get sort of this rhyme of the 1970s where in the 1970s we temporarily saw inflation rotate down and then we saw inflation come back and that led to really policy failures which created the Paul volcker of the 70s now of course there are arguments to be made that no well this isn't the 70s inflation expectations are relatively anchored and that's true even though they're very volatile they've been relatively range bound unlike what we had in the 70s when we left the gold standard and we left the the era of price caps government price caps which when those price caps were removed artificially led to massive surges of inflation because the market wasn't able to properly price goods and services beforehand the oil shock of the 1970s right they're absolutely massive differences but what the Federal Reserve knows is they do not want to repeat those mistakes of the 70s and so the thesis is hey just keep rates for as high as possible to make sure we can get inflation done and out of uh out of the American economy and then of course we've seen Supply chains catch up we've got a glut of ships especially memory cards rather than a lack of apply with a massive surge of American demand because of stimulus money that was printed and there's the argument from the optimistic point of view that hey well you know the Federal Reserve operates with long and variable lags of monetary policy which some say no those lags have actually shortened to about six to nine months so they're actually not that bad anymore but the big issuage pressures and so far at least the economist suggests hey wage growth is falling and yeah we've got high vacancies but maybe there's a better model because so far we've got a lot of confusing data right we've got data suggesting okay so inflation is starting to fall maybe this time is different from the 70s but how do we piece all of this together because the data is just so noisy and it's all over the place and the data that we've been using historically has been wrong I mean after all when the Federal Reserve talked about transitory inflation they were terribly wrong after the burst of inflationary stimulus that we got so maybe there's a better chart that we could use to actually model inflation better because so far what we're looking at is very noisy hey we look at CPI reports which suffer from massive uh fluctuations you look at the jolts reports which suffer from massive fluctuations even the labor report can't seem to count people appropriately or you count it twice you count it three times via the differences of the household survey and the establishment survey the numbers have been a mess however The Economist thinks that they have found a solution they suggest that there is one indicator that actually really appropriately provided the best warning that inflation was coming and if you look at that level today you could see that going back to 2019 the level of that indicator is 17 above its long-term Trend today for developed countries and consumer prices today are up about 14 percent above Trend in other words maybe this one Supply could be the most accurate and The Economist went back and said hey had we applied this one metric we would have seen that we were about to get a massive surge of inflation and The Economist argues that the people who are actually pointing out this one piece of data were correct when they said no you can't print this much money and not expect inflation however those are the same people that are now saying inflation is probably going to turn around a lot quicker than we expect and that data set is very simply The Following on screen now it is the M2 money supply and the growth chart of the M2 money supply which is really just a measure of people's savings deposits their time deposits uh in in Money Market funds or or basically money that you have available to spend right and this idea is that if we just look simply at nothing other than the M2 money supply we know that when it surges we are going to get a massive inflationary boost and when that money supply begins to stabilize inflation quickly goes to zero after a period of time and after then another period of time you end up actually with negative inflation which is what we're seeing with that M2 money supply Now The Economist thinks this could actually be the most appropriate metric to use rather than just the noisy data that we're getting and so it's interesting you know they talk about some risk factors they talk about the idea of a Chinese recovery the that we've regularly been talking about the Chinese recovery not actually providing too terribly much of a boost to oil so far there's this idea that hey maybe it'll increase oil prices by 15 and that'll lead to another inflationary boost however oil prices have actually been falling during the reopening probably because there was too much speculation around them this is where we talk about the money supply being one of the few indicators to provide an advanced warning of inflation how we are are affected by the trends and really the argument today is being made that if we look at just the M2 money supply potentially today we have the best indicator that inflation is going to fall rapidly now that's an idea right that doesn't mean it's a good idea all right idea but it's fascinating especially since you've got a lot of Wall Street Banks right now including JP Morgan Sadie Bank Morgan Stanley a lot of folks aren't making the argument that we're we're going going to see this rampant surge of inflation but the argument that's actually being made by a lot of banks right now is this idea that I'll draw out here and it's this idea that yeah if you look at the M2 money supply inflation is going to fall dramatically but that's not the problem the problem is the fact that the FED is listening to noisy indicators like the joltz report the labor report or whatever which would motivate them to keep rates high for so long that they end up destroying the economy that's the big fear so an investor now we have to look at this and go okay great so there's a lot of noisy data Maybe the M2 money supply does say that inflation is going to go down but then yet again you've got a Fed who thinks oh we're not convinced that it's going to fall because they're not really paying attention to the money supply just like they screwed up the first time now they're going to screw up again the second time and that's a pretty unfortunate red flag especially since since the FED might be unfortunately looking at data kind of like what you're seeing over in the Home Depot earnings call where when you go to the Home Depot earnings call you have a lot of talk about how in 2022 yeah hey people are becoming more price sensitive here uh from 2022 but people have been less price sensitive than we have expected in the face of persistent inflation says Home Depot you know that's not wonderful we want to hear people are price sensitive right hey we would expect there to be some moderation and spending because of the housing market slowing down but so far Home Depot says yeah yeah we're actually not really seeing that so far our spending uh has has uh normalized and even if we end up having a Slowdown hey you know what don't worry we're only going to see earnings Fall by a few percentage points but in the meantime what we're going to do is we're going to raise wages substantially because we still see a healthy consumer and Home Depot talks about how they're essentially going to spend an additional billion dollars on compensation for individuals they do say that price sensitivity has been a little bit more Broad in the fourth quarter compared to Q3 however they're still very uh optimistic they see less spending on some of the discretionary items like grills and Patio items uh really sort of optional items since you could probably just keep what you already have right uh but this is very similar to what we saw Walmart talk about as well individuals spending less money on discretionary items specifically things like a toys uh toys and what do we have over here we had a softness and toys consumer electronics home and apparel you're actually seeing Target almost I've noticed at least anecdotally shrink the the Home Improvement sector and try to enlarge other sectors like a beauty so I'm seeing Beauty encroach more on the Home Improvement and sort of flowers and plants and that sort of action and it sort of aligns with what Walmart's actually seeing people spending more money on health and wellness but less on sort of general merchandise consumer electronics home and apparel so you're seeing this this consistency of uh of a shift in spending Trends now how does all of this really come together as an investor well in in my opinion I think it's really clear that the most important signal we could pay attention to is the Federal Reserve when are they going to recognize that hey you know what if the M2 money supply is plummeting and we're about to get a massive bout of Housing disinflation and year-over-year comparisons which should drag inflation down substantially you've already got plenty of noisy indicators that are suggested yeah potentially short-term hotness but when we Trend it out over three months we're seeing substantial declines already whether it's in core inflation service is still somewhat sticky though right that's one sector where we haven't seen inflation roll over substantially yet but then again Services didn't start inflating until about a year after Goods started inflating it sort of takes time for those Embers of inflation to blow through the economy so all in all bottom line out of this sort of piece from The Economist and and Walmart and Home Depot well probably my anticipation is hey this is where we want to stay away from Staples as investors this is something I've been pretty consistent with staying away from Staples in 2023 as investors I mostly think that pricing power stocks are going to perform a lot better in 2023 I think those were the easy ones to sell in 2022 and it was easy to sort of escape to Staples but the trends that we're seeing are that most of the staple companies are expecting uh negative EPS that's where you're probably going to see the largest earnings recession which aligns with this idea that yeah which is going to affect poor people the most which means less spending on Staples and yeah eventually that M2 money supply should give us optimism that if eventually the inflation will blow over and that might end up being our most accurate signal so if I had to again simplify all of this maybe we could take great comfort in the fact that the M2 money supply is falling which historically has been one of the best indicators of inflation falling and it certainly was one of the best indicators that we had that inflation was about to Surge and inflation wouldn't be transitory at least in the time frame that the Federal Reserve thought and instead we then look at okay well then in the meantime where are consumers going to spend well potentially PP pricing power style stocks where people where companies are still going to be able to sell their goods and services because they're either smaller and still growing or they appeal or cater to potentially a higher income demographic or a higher cash flowing business that is able to sell to other businesses goods and services that are essentially Investments like a lot of companies are suggesting hey maybe one of the best places to invest right now could be in battery manufacturing or or a Fabs for chip making so that way uh server infrastructure can continue to be built because if server infrastructure continues to be built well then SAS businesses can continue to succeed and SAS businesses are where we're actually seeing way less of a decline than we expected SAS businesses led by companies like fortnite and cloudflare and the earning cycle have actually been doing substantially better than expected and guess where they're seeing weakness they're seeing weakness in the small business sector which is generally the sector that has the lowest level of actual profitability and income that's after all why they are called small businesses because they haven't gotten to the level of large scale yet because they don't have enough of a profitable product or pricing power so and to me it all aligns pretty clearly we could be wrong right knock on wood that we're not wrong but The Economist projection here of massively declining inflation should give us confidence that eventually inflation will disappear the question then is how much did the Federal Reserve destroy markets and where is that destruction likely to be worse in my opinion it's likely to be worse where the lowest income demographic creates the highest amount of spending and that's in Staples it's in groceries it's in Foods Tyson Foods plant-based Foods uh it's uh it's in your targets your Costcos your Sam's Clubs your Walmarts any it's the dollar store essentially anything where you you are selling to uh basically everyone right lower income middle income and higher income those are probably going to be hit the most in 2023 just my opinion even even a McDonald's the reason for that is you are seeing more price competition there's a reason and I know this one sounds crazy but there's a reason Whole Foods is saying hey we're going to start cutting prices even though it's going to cut into our margin it's an Amazon company obviously and that's to put pressure on companies like Walmart to try to bring higher income consumers back to Walmart right and this creates pricing Wars and I think the price you're going to see the largest pricing Wars are are actually in areas where we're looking at things people generally quote unquote have to spend on Foods because foods will see a limit how much foods can really raise prices now people think that's remarkable but if you really want to see where there's a limit on some of these staple items read the earnings call from a company like Energizer or Tyson Food and you'll see they're basically as I've been saying taking it in the margin in my opinion and maybe in like an eerie way it all aligns too well because usually when things line up too well you kind of Wonder like hmm what are you missing well then of course yeah you've got risk factors like okay well what if China has a Commodities uh you know put so much pressure on Commodities that we end up seeing commodity prices Skyrocket again but then you wonder how much has that idea already been been built into trades and so far it hasn't been materializing that trade has been failing this idea of a hundred dollar a barrel oil so far has not materialized remotely if anything it's trending in the opposite direction we're seeing more fears about a recession right and actually staple price is therefore coming down now rather than fears about about this runaway second wave of inflation uh so again that reiterates to me that okay a fine unfortunately uh that's bad news uh for potentially Commodities uh you've got bad news for uh companies selling Staples because yet they're also having to raise wages now some would say hey well wait a minute isn't that indicative of a wage price viral well not necessarily because a lot of the wages that are rising are in lower income sectors like your Walmart staff your your Home Depot staff which actually bring your average hourly wage in America down average hourly wage in America somewhere around 32 bucks an hour We're where's the average hourly wage is somebody working at a Walmart or Home Depot or fast food places somewhere around 17 to 20 an hour so you actually end up bringing wage pressures down of course what do you do you end up as long as and that that the theory is that that should show up in consumer prices right because companies will continue to pass on their prices but so far nobody's really still talking about hiking prices there's some hot segments Aviation still being one of those segments and some of the companies like Johnson and Johnson and Staples providers suggest hey we've got we've got our last sort of price increases setting in now but that's it we're done even the Pet Food suppliers are like look you know we've we've got a little bit more of of pricing elasticity in us but we're seeing a massive decline in in pet household formation people are starting to spend less money our pricing power is waning like we're almost done we can't do any more much longer so things in an eerie way are really aligning to suggest inflation will not be a substantial long-term issue however there is a lot of fear now that we're not terribly worried about that second wave of inflation we're actually because especially if we look at a strong leading indicator like M2 money supply as The Economist told us but we're actually more fearful about the Federal Reserve overdoing it and overtighting because of the noisy data we're getting uh and that unfortunately is a potential reality that yeah we could go through a very uh as I've been saying a very volatile Nike Swoosh recovery I think when we when we talk about the Nike Swoosh people think I'm drawing something that's very very smooth like this but they're forgetting the noisy part that I talk about right and the noisy part is are set up by days like what we had yesterday and substantial pain uh in the stock market so uh some of my Theses uh you know but so far you know we'll see Financial conditions definitely are tightening it's in the 10 years sitting at about 3.95 certainly a tightening of financial conditions which is going to sort of continue to crimp uh inflation without even the Federal Reserve doing anything that again I think the Federal Reserve is cognizant that they do have a dual mandate they want to make sure that we don't unnecessarily force people into joblessness uh so we'll see someone here says so you're telling me not to hoard eggs and chickens to resell them yes both of those have very small PP very very small PP lacking pricing power just read some of the earnings calls for companies who uh who actually Supply those system be careful about that uh the inverse Nike Swoosh inverse Nike Swoosh uh that would imply a slow decline in a rapid increase or unless you're saying I just didn't draw it well enough well okay there draw it kind of a little bit more like this right but the idea is that this is a very rapid Decline and this is sort of a very slow uh slow and volatile up right there you go a little bit better a little bit better of a drawing anyway my thesis we'll see we'll see what plays out but I I I think a lot of it uh makes logical sense but then again I'll tell you one one place that isn't logical is the stock market
Comments 0