The Source @ AXA Equitable

The Bugaboo in the Background: Inflation

Posted March 16th, 2012 at 6:30 PM EST

News Brief from AXA Equitable: Highlights from recent notable market news reports
March 16, 2012

Better-than-estimated economic and corporate reports spurred the S&P 500 to rise above 1,400 this week for the first time in almost four years. The index is on pace for the best quarter since 1998.

So, where’s the party you ask?

Not so fast….By week’s end, both stocks and the sentiment of some experts seemed tempered by inflation concerns, fueled by rising oil and consumer prices.

“The bugaboo in the background is oil prices,” Madelynn Matlock, of Huntington Assets Advisors, told Bloomberg. “Things are improving at a slow, but steady pace. If oil prices pop up, it will be a different story.” (Bloomberg: “Most U.S. Stocks Decline as Oil Rally Bolsters Concern,” by Rita Nazareth, March 16, 2012).

Popping oil prices triggered the cost of living to increase in February by the most it has in 10 months, foreshadowing this week’s reports of consumer confidence unexpectedly falling in March.

Robert Arnott, chairman of Research Affiliates, a Pimco subadviser, warned in an InvestmentNews interview this week that the real story on inflation will soon be told.

“We’ve been protected by a sputtering economy,” he said. “If the economy regains traction and we get slow to moderate growth, we’ll see higher inflation sooner than we’d like.” (InvestmentNews: “Real Story on Inflation will soon be Told,” by Dan Jamieson, March 15, 2012)

IMPORTANT — AXA Equitable, AXA Advisors, LLC (member SIPC) and their affiliates do not provide tax/legal advice, or investment or market research. The quotes provided in this News Brief have been excerpted from media reports for general informational purposes only and do not represent the opinions of AXA Equitable, AXA Advisors or their affiliates, associates or employees. AXA Equitable and its affiliates make no representation as to the accuracy or completeness of any statements, statistics, data, opinions, forecasts, or predictions provided herein, nor will this information necessarily be updated or supplemented at any time. Any reference to market or index performance is for informational purposes only. It is not possible to invest directly in an index. This material is not intended, and should not be relied upon, as investment or financial advice and does not constitute an offer or solicitation of any kind.

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