GDP price index for domestic purchasing:
-3.9% in Q4 2008
-1.0% in Q1 2009
GDP price index for domestic purchasing ex food and energy:
+1.2% in Q4 2008
+1.4% in Q1 2009
Those numbers are pretty cut and dry. The plunge in consumer price inflation that hammered equities in Q4 of 2008 is subsiding and this is the kind of fundamental data that leads to higher prices of equities and money-flows that go out of the USD, JPY, and Treasuries and back into those higher risk markets. These price and inflation numbers are what I consider to be some of the core underlying fundamentals of what moves markets and money-flows and it's glaringly obvious why equities have recovered in 2009. The correlation between prices, inflation, and equities shows part of the story for why and how equities have been able to recover, these fundamental correlations are working just as they should should be and even though there are signs of disinflation within other fundamental data, this GDP report reveals possible resurgence of price pressures.
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