Editor’s note: We’ve been writing you this week about the latest CPI figures… how 3% inflation is going to be the “new norm”… and how the Fed has orchestrated this “stubborn inflation” situation.

So, today, we’re spotlighting an essay from colleague Phil Anderson with his own insight into the inflation debacle.

Phil is an economic cycles expert with decades of experience predicting major market shifts… all based on a real estate-driven 18.6-year cycle that drives markets.

And he’s here today with a gentle reminder that the market isn’t the economy… and forgetting that and letting the sensational headlines affect how you invest would be a mistake.

But first, today’s markets…

Market Data

The S&P 500 closed down 1.5% to end the day at 5,123.41… the NASDAQ lost 1.6% to close at 16,175.09.

In commodities, West Texas Intermediate crude oil trades at $85.53, down 12 cents…

Gold is $2,359 per troy ounce, down $32 from yesterday…

And bitcoin is $67,240, down $3,337 since yesterday.

Now, over to Phil…

I feel like I’m stating the obvious here… but even the simplest truths get forgotten or drowned in the endless sea of noise.

So here we go again…

The latest inflation numbers have shocked some investors. Annual inflation in the U.S. ticked up to 3.5%, slightly higher than expected.

And the expectation was for… wait for it… 3.4%.

I don’t need to tell you that a 0.1 percentage point difference means nothing.

But market commentators were happy to project gloom and doom based on it.

What’s the Bigger Picture?

Larry Summers, former Treasury secretary, said that investors need to start thinking that the Fed’s next move will be to increase interest rates, not cut them.

Words like these move markets. They closed about 1% lower compared to their April 9 levels.

But the bigger picture remains the same…

The U.S. economy is doing well. It managed to navigate one of the steepest series of hikes in decades.

The labor market is doing just fine, too.

The latest inflation number doesn’t change any of this. Neither will the next one.

Unless another pandemic or something similarly big and unpredictable happens, everything will be fine… as it should be at this stage of the 18.6-year cycle.

There’s an Even Bigger Picture

But don’t forget this simple idea.

The market isn’t the economy.

The economy goes through booms and busts, expansions and contractions. It’s normal, it’s called the business cycle.

But the market goes through its own cycles. And the 18.6-year real estate is one of the most important ones.

I have been studying it for decades, and it helped me make some of the biggest investment decisions in my life.

It’s easy to forget this simple truth: the market isn’t the economy.

But that’s what mainstream media does. And this mixing up of the two creates confusion.

Which means if you follow the latest news and take it into account when it comes to your investment decisions, you’ll always underperform. You may have success here and there, but unless you have a solid system that cuts through the noise, you’ll be at a disadvantage.

I am not a student of “the economy.” I don’t make decisions based on the latest unemployment numbers, imports, exports, GDP, and other statistics.

I’m an investor, and I write for investors. This means that, for me, studying the markets is much more important.

And that’s what I did, and I understand how cyclical markets are and how I can profit from the 18.6-year real estate cycle.

My readers know how to use the cycle, too. And what information to pay attention to.

This inflation release is noise. The next two or three years will be phenomenal for markets. That’s what the 18.6-year cycle tells me. And that’s what you really need to know.

Regards,

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Phil Anderson
Contributing Editor, Inside Wall Street With Nomi Prins

More Markets

Today’s top gaining ETFs…

  • First Trust Flexible Municipal High Income ETF (MFLX) +1.1%

  • Invesco New York AMT-Free Municipal Bond ETF (PZT) +0.7%

  • Invesco Taxable Municipal Bond ETF (BAB) +0.5%

  • IQ MacKay Municipal Insured ETF (MMIN) +0.5%

  • iShares 7-10 Year Treasury Bond ETF (IEF) +0.4%

Today’s biggest losing ETFs…

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  • Global X Lithium & Battery Tech ETF (LIT) -3.8%

  • SPDR S&P Semiconductor ETF (XSD) -3.6%

  • KraneShares MSCI China Clean Technology ETF (KGRN) -3.5%

  • Amplify Transformational Data Sharing ETF (BLOK) -3.5%