07/12/18: Data released today by the U.S. Department of Labor indicate that the year-over-year rate of increase in the price of a broad group of U.S. household goods and services, as represented by the Department’s Consumer Price Index (“CPI”), rose for the fifth consecutive month during June, to 2.8%, from 2.7% during the prior month.

Consumer-Price-Index-(06-18)-revised

With our research indicating that the United States’ pace of economic growth will also accelerate over the next few months, we expect the CPI to continue to move higher. Such a development would bode poorly for the future direction of U.S. stocks in the event that the year-over-year rate of increase in the CPI were to rise above 3.0%, as stock prices, in general, tend to trend lower following periods during which the CPI rises to above that level for several months.