Check this indicator before you buy growth stocks

We are starting this week to digest inflation as seen through the lens of the printed Consumer Price Index (CPI) for April, which came out last week. And there is good news and bad news. It’s lower than it used to be – but higher than we expected. Does this mean that we have reached the highest inflation?

I’m one of those people who believes it is. As we enter the final half of 2022, the circles a year ago will be much harder and it will be harder to have a hot print year after year. That is why many – including us – believe that the highest inflation has been reached.

But this is not the main indicator.

Instead, we want to see a slowdown in inflation in monthly interest rates, which has slowly begun. But does this mean that inflation will soon disappear? Probably not. I think we have a long way to go to fight this battle, and it will be a rather slow process to return to a ~ 2% inflation rate.

We are talking about a further 16 to 20 months.

The 10-year yield has begun to stabilize and should continue to stabilize as inflation slows. This will allow shares to rise if profits remain strong.

However, if oil rises this summer with rising demand, inflation could also jump – and with the Fed’s announced interest rate hikes, this could be a recipe for disaster for a 10-year period and for stocks.

However, I have noticed that a lot of smart money is bought at Spotify (NYSE:SPOT), Shopify (NYSE:TRADE), DocuSign (Nasdaq:DOCU), in SoFi (Nasdaq:SOFI), where all CEOs largely bought dip. And that’s because these leadership teams believe in their ability to cut costs, get rid of market volatility, and grow quickly on the other hand.

In fact, the volume of insider purchases rose to a two-year high. At the same time, inside information sales fell to their two-year low. The last time this happened was in March 2020 – at the bottom of the pandemic-induced sell-off.

This is a pretty bullish indicator. The fact that smart money buys rather than sells inspires us with the stocks they accumulate.

To hear more, press jump to watch and listen now.