Early secular inflation boosts equities temporarily
The host argued that the early stages of secular inflation are structurally supportive of the stock market before negative feedback loops kick in.
The argument
The host explained that while investors associate inflation with market downturns, it is historically positive for equities initially. He expects the market can continue higher in the intermediate term before facing serious headwinds as inflation fully takes hold.
The thesis, stress-tested
✓ What validates it
- ✓S&P 500 maintains its pattern of higher highs and higher lows above the 6,600 level
- ✓NVIDIA's upcoming earnings report acts as a positive pivot point for the broader market
▸ Risks discussed
- ▸Inflationary feedback loops could kick in sooner than expected
- ▸Market breadth is currently poor, with only 40% of stocks trading above their 50-day moving average
Hear it yourself
"Well, Patrick, as I've said before, I think we're in the early stages of a secular inflation, and the trap here is everybody mentally associates inflation with really bad for the stock market. It's only really bad for the stock market after a bunch of feedback loops kick in that haven't kicked in yet."
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