Thu, Aug 14, 2025|Nick Koziol

Short-Lived 'Good' Inflation

The latest on jobs... A two-month low for oil prices... Don't bet on energy stocks just yet... A new crypto IPO... The latest on the strategic crypto reserve...

And just like that, inflation fears are back...

Earlier this week, we wrote about inflation giving the market some "good" news. Tuesday's consumer price index ("CPI") report showed inflation still above the Federal Reserve's target of 2%... But the numbers weren't "hot" enough to shake the market's confidence that the Fed will cut rates next month.

Today raises some questions, though...

In a new release, the producer price index ("PPI") for July rose 0.9% month over month, well above Wall Street's estimate for a 0.2% increase. On a year-over-year basis, PPI rose 3.3%, also above the expectation of 2.5%.

This was the biggest "miss" for Wall Street's PPI expectations since February 2021 – when the index came in at 1.2% month over month versus the 0.4% estimate, according to Bespoke Invest.

That ended up being the first month of the notorious inflation spike that ran throughout 2021 and 2022.

PPI measures prices paid by manufacturing, mining, and service businesses in nearly every industry. And it can be a precursor to consumer prices...

If companies' costs keep rising (as measured in PPI), they're likely to raise prices in order to protect their margins. Only time will tell if these higher costs stick around, get passed on to consumers, and show up in consumer inflation data.

The market is still pricing in a roughly 90% chance of a rate cut at the Fed's September meeting. But other signs show that investors are warier than they were on Monday.

Stocks dropped immediately after the PPI numbers came out this morning, though they recovered later in the day to end up flat.

Meanwhile, oil's at a two-month low...

Also in Tuesday's Digest, we noted how the prices of gasoline (down 9.5%) and fuel oil (down 2.9%) helped headline CPI come in below estimates. And that trend could continue...

Oil prices (as measured by West Texas Intermediate crude) are sitting at the lowest level since the end of May at around $64 a barrel. That's a 19% decline from the same period a year ago. And the International Energy Agency ("IEA") has doubts about that trend reversing anytime soon.

In its monthly oil market report, the IEA raised concerns about new supply outpacing demand for crude oil in the coming months. Specifically, the IEA is worried about new supply flooding the market from OPEC nations, which are in the process of unwinding production cuts.

Demand is an issue, too. From the report...

The latest data show lacklustre demand across the major economies and, with consumer confidence still depressed, a sharp rebound appears remote.

That doesn't inspire confidence in a rebound in oil prices anytime soon.

So it's not time to dip your toe into energy stocks just yet...

Last week, our colleague and DailyWealth Trader editor Chris Igou gave his latest take on this sector. It has lagged the broader market this year – with the Energy Select Sector SPDR Fund (XLE) down 2% versus the S&P 500 Index's 10% gain.

But according to Chris, technical indicators like the 200-day moving average (200-DMA) suggest that things aren't going to get better anytime soon. From his August 5 issue...

If XLE rises up to its 200-DMA from below, it'll often stop rallying and turn lower. And the longer that resistance level holds, the stronger it is.

XLE just hit resistance for the third time in a little more than a month and dropped once again.

The 200-DMA isn't the only thing stopping energy stocks. Another warning sign is flashing for the energy sector, as measured by the moving average convergence divergence ("MACD") indicator.

More activity in the crypto market...

This week, you've heard a lot from our colleague and Crypto Capital editor Eric Wade about cryptocurrencies. And this sector keeps making fresh news.

Yesterday, the crypto company Bullish went public on the New York Stock Exchange under the ticker symbol BLSH. Bullish operates a cryptocurrency exchange, and it also owns crypto news and data site CoinDesk.

Bullish opened at $37 per share – above the planned range of $32 to $33 per share. At $37 per share, Bullish had a valuation of $5 billion.

And it surged from there in a matter of hours. Yesterday, the stock hit an intraday high of more than $100, before closing at $68 – nearly doubling its opening price. Today, the stock jumped again, up more than 9% – bringing its market cap to around $11 billion.

Not only did high demand drive the price higher, but Bullish also boosted the offering by 50% – from 20 million shares to 30 million – to meet investor appetite.

Bullish is just the latest crypto-related IPO to hit markets this year. Stablecoin payments network Circle Internet (CRCL) and trading platform eToro (ETOR) have both gone public this year to mixed performance. (Circle has roughly doubled, while eToro is down 9%.)

And more are on the way... Cryptocurrency custody company BitGo (which serves as a "vault," holding cryptos owned by others) and exchange Gemini have both filed to go public later this year.

An update on the government's strategic crypto reserve...

This morning, Treasury Secretary Scott Bessent threw cold water on hopes that the government would be buying bitcoin on the open market to fill its new strategic crypto reserve.

Instead, the government will fund the reserve by holding onto the cryptos that it has confiscated. Bessent said they're worth between $15 billion and $20 billion.

Bitcoin fell on the news, down more than 4% to $117,000. Still, that's just about where it was over the weekend. So even after that news, the world's largest cryptocurrency is still within a few percent of its all-time high from yesterday.

Even if the government is not buying cryptos on the open market, holding up to $20 billion worth of them is enough to show that Uncle Sam is a believer in the technology.

And as Eric wrote on Monday, this is all part of President Donald Trump's plan to make the U.S. the "crypto capital of the world."

The strategic bitcoin reserve isn't the only move, either...

Eric just went live with a brand-new free presentation detailing how the White House's next move in crypto could launch the "biggest trade of all time." He breaks down the coming financial shift and even shares the name of a free recommendation he believes could deliver 10 times your money, or possibly more, from here.

If you haven't caught Eric's presentation yet, we urge you to watch it here.

Existing Crypto Capital subscribers and Stansberry Alliance members can also watch Eric's new briefing... But know that you also have access to this information and all of Eric's research here.

New 52-week highs (as of 8/13/25): Allegion (ALLE), Atmus Filtration Technologies (ATMU), Barrick Mining (B), Alpha Architect 1-3 Month Box Fund (BOXX), Dimensional International Small Cap Value Fund (DISV), Electronic Arts (EA), Western Asset Emerging Markets Debt Fund (EMD), iShares MSCI Emerging Markets ex China Fund (EMXC), iShares Ethereum Trust Fund (ETHA), iShares MSCI Italy Fund (EWI), iShares MSCI Spain Fund (EWP), FirstCash (FCFS), Franklin FTSE Japan Fund (FLJP), Franco-Nevada (FNV), VanEck Junior Gold Miners Fund (GDXJ), iShares Convertible Bond Fund (ICVT), iRhythm Technologies (IRTC), Lumentum (LITE), Lynas Rare Earths (LYSDY), Match Group (MTCH), OR Royalties (OR), Ryder System (R), ProShares Ultra Technology (ROM), Sandstorm Gold (SAND), SSR Mining (SSRM), Vanguard S&P 500 Fund (VOO), and Vanguard Short-Term Inflation-Protected Securities (VTIP).

In today's mailbag, more feedback on the labor market and the next possible head of the Bureau of Labor Statistics, E.J. Antoni... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

"I see Trump did not like 'actual' data, so fired someone... I see great announcements of potential spending in the US over time (maybe), but nothing about actual 'high paying' jobs associated.

"Question: Is part of the new statistics person's job task to figure out how to count robots (which will likely be the majority of 'workers' in these facilities) as part of the workforce?

"Will there be a new category of folks created for those who were displaced by robots but have insufficient skill sets to do much else, so will become a new 'idle' class?" – Subscriber William H.

Good investing,

Nick Koziol
Baltimore, Maryland
August 14, 2025