6.33 PPI Crash: Unveiling Inflation's Future or Corporate Gouging? | Nucleus Investment Insights

Globally producer price indexes have turned down quite decisively. China is trying to deal with deflation.

There are two main explanations, with diametrically diverging investment outcomes.
Under the first scenario, producer price inflation is a leading indicator for consumer price inflation. Falls in the producer price indexes will inevitably flow through to inflation indexes. Sell stocks, buy bonds.

Under the second scenario, the gap is an indicator that companies continue to be able to expand margins. It is a sign that companies are raising prices to consumers faster than their own costs are growing. Buy stocks

Join us in this week's podcast as Nucleus Wealth Chief Investment Officer Damien Klassen and Senior Financial Adviser Samuel Kerr dig into the arguments and look at the evidence.

Agenda:

What is the Producer Price Index
Divergence or lag
Two options: good for margins, terrible for margins
Reporting season

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Nucleus Wealth is an Australian Investment & Superannuation manager that can help you reach your financial goals through transparent, low-cost, ethically tailored portfolios. To find out more head to Nucleus Wealth Website.

The information on this podcast contains general information and does not take into account your personal objectives, financial situation or needs. Past performance is not an indication of future performance. Damien Klassen is an authorised representative of Nucleus Wealth Management. Nucleus Wealth is a business name of Nucleus Wealth Management Pty Ltd (ABN 54 614 386 266 ) and is a Corporate Authorised Representative of Nucleus Advice Pty Ltd - AFSL 515796