Recent July CPI data may have confirmed that inflation has hit its peak. The stock market rallied in reaction to the news, as inflation was flat in comparison to June’s inflation data. This news caused a shift in consumer and investor sentiment. Consumer sentiment rose in the month of August from the lowest levels it has shown since 1952. All eyes are awaiting the next Fed meeting & CPI data in September, to see if this was indeed the precipice for inflationary pricing,
The Fear and Greed Index (via CNN), which attempts to gauge market sentiment, rose from a fear reading in July to neutral-greed levels. This index uses several different factors in its assessment of market conditions including; bonds, various derivatives, the strength & momentum of equities, and the demand for safe haven assets. Investors both retail & institutional, are now expecting the tides to turn, as capital came pouring in equities and crypto assets following the most welcoming news investors had received in months.
One area which benefits and acts as a defense mechanism during periods of inflation, and appreciates in value during a bullish economy, is multifamily real estate. Break of Day Capital is currently focused on the Arizona market, specifically Tucson, where we currently oversee $161mm AUM and have amassed tens of thousands of quantitative & qualitative data points. The housing market in Arizona saw a year-over-year increase of 27.4%, creating a thin supply & high-demand for housing. CNBC has Arizona listed as number 8 in the top 10 states with the most stable housing markets.