Using Trash Bill As Stock Market Indicator
Can a trash bill signal stock market movement?
Traders are always watching for a signal that can tip off or validate anticipation of the next market shift.
But can a trash bill from the local service provider be considered a stock market indicator?
Can a trash bill signal market direction?
Danielle Shay, Vice President of Options at Simpler Trading, has developed a knack for identifying how the market might move next.
She shared how a routine part of daily life recently offered insight into where this uncertain market is headed.
Danielle received a notification from her local utility service stating that her trash bill was on the rise. She shared how the previous quarter the service charged an extra $65 for “fuel surcharges.” For the current quarter the service removed the “surcharge” and then raised the price of the service by 50%.
She credited the billing change to the service avoiding questions about the previous fuel surcharge since gasoline prices have dropped after the last billing. Danielle sees this trash bill as a sign of inflation with no chance of a price drop, even if fuel charges fall further.
Danielle pointed out that in the span of a week she also received notifications from an accountant and a storage unit that both are substantially increasing prices.
These day-to-day and recurring services are signs of inflation costs continuing indefinitely. As the bills for consumers rise, there is a noticeable stock market reaction.
“I’m not buying that inflation is coming down in any meaningful way,” Danielle shared in her recent newsletter. “While gasoline prices may have come down after that June peak, inflation has become ingrained and I think businesses and services are at the point where they know they have to raise prices or that they can get away with raising everything, citing inflation.”
Danielle shared how she sees inflation as taking hold of the economy, and is affecting the stock market, during a televised segment of Making Money with Charles Payne.
The trash bill is just one example of inflation (and a stock market indicator), but rising consumer costs are inflating prices of food, utilities, services, manufacturing goods, and more. Higher prices were revealed in the Tuesday morning release of the latest U.S. Consumer Price Index (CPI) numbers.
“This means that businesses and services aren’t going to suddenly cut prices just because of falling gas prices,” Danielle said. “That means CPI can’t and likely won’t fall in a meaningful way until or unless demand is substantially reduced.”
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Down days of September back on track
Inflation numbers remaining at a 40-year high level opens the door for more market volatility.
“Higher than expected inflation is bad news for the market because Wall Street was so convinced that because gas prices have come down, it would demonstrate that CPI is coming off in a meaningful way,” Danielle said. “What this result means is that last week’s oversold bounce is dead in the water.”
She believes the historically down month of September is right back on track.
“CPI set us up for the next leg lower,” Danielle said. “Technology, semiconductors, and mega-cap stocks are all weak right now and barely hanging above the lows of the year. Those go, so goes the Nasdaq down to new yearly lows.
“Inflation is embedded in the economy,” Danielle said. “The path of least resistance is down, and that is where I remain focused.”
Consider that trash bill as the latest stock market indicator.