Landon Capital

Who hasn’t heard about inflation in recent years? Since the end of the pandemic and the enormous stimulus plans carried out by the world’s large economies, inflation has grown a lot in most countries in the world, mainly due to a mismatch between the supply and demand caused by the restrictions in the activity during the pandemic.

But what is inflation? Inflation is the general increase in prices and products and services in a country. For example, if only the prices of a product or raw material rise, such as copper or tomatoes, this would not be enough to classify a situation as inflationary. It must be a general increase.

Generally, inflation is measured with a consumer price index (CPI), although they are not exactly the same, since the CPI considers only a basket of goods statistically, and the measurement of inflation considers the entire economy as a whole.

Beyond the effects it may have on consumers, it is very important to consider the effects of inflation on stock prices. Like almost everything, this effect can vary by sector and company, and will also depend on the magnitude of inflation.

An inflation of approximately 2%, which is the usual target percentage of the central banks, is something considered positively, because it causes prices to rise, more income for companies (since this is the quantity multiplied by the price) and moves the economy forward, which also means that more investments can be made and more people can be hired.

A drop in prices would totally be negative and generate a crisis, since people would wait for prices to drop to spend money, contracting the economy. And a very high inflation would not be beneficial for companies either, since economic actors do not know exactly what price the products will have, growing instability, as has happened in Venezuela or Argentina, more recently.

It must be taken into account that high inflation rates force central banks to raise official interest rates, making interest rates from banks more expensive when people and companies borrow money, causing a reduction in consumption and contracting the economy, so this effect would also be negative for companies and consumers.

Therefore, positive but relatively low inflation is what best benefits stocks.

However, it must be taken into account that there are companies that are protected against this inflation, such as many concessionaire companies or real estate companies, which in their own rental contracts update the rents with inflation. These companies, then, have their income totally linked with inflation.

S&P 500 Hits All-Time Highs Based on The Strength Of Technology Stocks

Story by Keith Pinder

The S&P 500 arriving at all-time highs because of the strength of innovation stocks is a huge occasion in the monetary business sectors. Innovation organizations, especially those in the product, equipment, and semiconductor areas, have been significant drivers of market development as of late. It has led to nonstop development and improvement in innovations, man-made consciousness, distributed computing, and 5G. Most organizations are also making profits, like Apple, Microsoft, Amazon and Google. This flood can be credited to a few variables:

Solid Income Reports And Financial Backer Feelings

Numerous tech organizations have areas of strength to reveal, frequently surpassing experts’ assumptions. Strong monetary execution helps financial backers with certainty and drives stock costs higher. There is an overall opinion among financial backers that innovation organizations will keep on driving monetary development. This confidence is reflected in the high valuations and venture inflows into tech stocks.

Low Financing Costs

The low loan fee climate has made values, especially development stocks like those in the innovation area, more appealing to financial backers looking for better yields. As economies all over the planet go through advanced change, the market for innovation items and administrations extends, giving learning experiences to tech organizations. This ascent in the S&P 500, driven by innovation stocks, highlights the huge job that the tech area plays in the more extensive economy and monetary business sectors.

Area Authority

Innovation organizations frequently lead the market in advancement and development. Thus, they are viewed as bellwethers for the general market. Their administrative roles frequently set the rhythm for different areas, creating an expanding influence that helps in general market execution.

Consolidations And Acquisitions

The tech business has seen an influx of consolidations and acquisitions as organizations hope to solidify their positions, procure new innovations, or enter new business sectors. These exercises can drive up stock costs, both for securing organizations and for achieving objectives.

Worldwide Reach And Market Development

Numerous tech monsters have a huge worldwide presence, with significant income coming from global business sectors. Venture into developing business sectors, where computerized reception is speeding up, gives extra learning experiences.

Financial Backer Expansion 

With the rising unpredictability in conventional areas like energy and retail, financial backers are broadening their portfolios by expanding their openness to innovation stocks, which are seen to offer better development possibilities and versatility.

Mechanical Coordination In Different Areas

Innovation is turning out to be progressively coordinated into different areas like medical care (e.g., telemedicine, wellbeing tech), finance (e.g., fintech, blockchain), and auto (e.g., electric and independent vehicles). This cross-area reconciliation further advances the development of tech organizations.

Good Government Arrangements

In numerous locales, government strategies and drives support mechanical advancement and framework improvement. These strategies can incorporate duty motivators for research and development, awards for tech new businesses, and interests in advanced foundations. Market liquidity and financial backing Way of behaving has also changed. The simple entry and the allure of high-development stocks draw in an expansive base of financial backers.