Dan Passarelli, CEO - Market Taker Mentoring

This morning we had the CPI number come out. That's the consumer price index. And holy smokes, was it hot. It looks like the Consumer Price Index rose 9.1% from a year earlier, and that's a lot! That's the highest inflation number that I can remember seeing in my days. Now that said, we kind of need to break it down just a little bit to understand it a little bit more. Of all the different products and services and things that they factor into that all are not necessarily created equal. They're a little bit sector based. Now, when we remove from that equation the more volatile food and energy components because as we know, gasoline prices, oil prices, they're very high lately, right?

When we stripped that out, what we call the core CPI is actually only 5.9% higher than a year earlier. So that said, all sectors are not created equal. Kind of a similar theme to what I was talking about in yesterday's video. If we also look at rents, rents are rising at a higher rate than they have in the past 30 years as well. Now, we do know one thing for sure.

We do know that across the board prices have been rising, but again, not so much equally. So we need to really think a little bit about why some of these things are happening. And it really all stems from supply chain issues that were caused by the pandemic when it started and a lot of them just never really ended up catching up, right? That's why we have some of the oil problems. That's why we have a shortage in inventory and houses, which is getting a little bit better.

But when there's a shortage of inventory in houses, then people are buying fewer houses because the cost of them went up great deal and now they're renting and that's driving up rent prices. So just looking at the surface number of 9.1% just doesn't really tell you enough of the story to make any good decisions when it comes to doing your trading. So we're going to talk more about this as we move forward.

One of the things that we're going to be looking at moving forward is earnings of some of these individual companies. Because that's going to tell us which companies are able to survive through this inflationary period where component input prices are going up, which include everything from buying the components they need to assemble products to the cost of labor, which companies are better able to weather that storm and which are really going to be getting punished severely by inflation.

So this is a really important earning season. I'm going to be doing a webinar on earnings and I would like you to see it. And the place to register for that is going to pop up right after this video is over.

And if you're interested in learning more about how I think about earnings and trade them, I have a special complimentary webinar coming up that I would love to have you attend so that I can share all my thoughts with you on earnings and how they work and how I trade them. And you can join by going to the link that's going to pop up right after this video. (go to: markettaker.com/reg)