By Philip van Doorn
Also, a big bitcoin hack, meme-stock analysis, the red-hot car market and a quest for the perfect cheap retirement location.
Inflation is a big topic of conversation among consumers and investors.
The U.S. economy is booming and the labor market is tight (link), putting upward pressure on wages. Meanwhile, the money supply has increased considerably because of the Federal Reserve's stimulus. Supply shortages and pent-up demand for cars and homes have brought their own pricing pressure.
But what is inflation really? Rex Nutting takes a detailed look at how market economies work and explains the difference (link) between short-term price changes and real inflation, and how policy makers identify broad inflation and what they do about it.
More about inflation:
Want to buy a car? Here's what to expect
Claudia Assis looks at the dynamic market for cars, trucks and SUVs in the U.S. as consumers increase their driving and look for new wheels. Here's what to expect as auto dealers and manufacturers change with the times (link).
Hackers' bitcoin is hacked
Speculating on bitcoin has been lucrative for many investors and traders -- and painful for many as well -- in light of the cryptocurrency's volatility. But a virtual currency can actually be used to make or receive secure payments while protecting users' identities.
That makes bitcoin ideal for hackers using denial-of-service attacks to hold companies for ransom. But in the case of Colonial Pipeline Cos., after a ransom was paid to a hacker group calling itself DarkSide, Department of Justice agents were able to track down and recover about $2.3 million in bitcoin that had been paid to the hackers.
Odeon Capital Group analyst Dick Bove wrote in a note to clients on June 8: "Without attempting to understand the complex world of ransomware, the point that emerges from the DOJ's success is that bitcoin can be hacked. This can only be described as frightening to all users of the system, unlawful or not."
Mark DeCambre explains how the federal agents may have recovered bitcoin from DarkSide's cryptowallet (link).
More bitcoin and crypto coverage:
Closer look at meme stocks
Investors and traders looking to make quick gains on shares of GameStop Corp. (GME), AMC Entertainment Holdings Inc. (AMC) and other meme stocks try to time their trades in line with the flow of conversations on Reddit's WallStreetBets channel and other social media. But what about the companies themselves? Might some of the meme stocks make reasonable long-term investments?
More meme-stock coverage:
Can you have it all for $30,000 a year?
As part of her series about retirement locations (link), Silvia Ascarelli tries to help a reader find what may be impossible: A rental apartment in a walkable town with an interesting history, with four seasons, low taxes and low humidity, on a total budget of $30,000 a year (link).
For your own retirement location search, try MarketWatch's upgraded retirement location tool (link), which now includes data for more than 3,000 U.S. counties.
Advice for a retirement saver
In her Help Me Retire (link) column, Alessandra Malito works through financial scenarios with readers to help them be better prepared for life after their careers end. This week she helps a military veteran who is close to retirement (link) by digging into liquidity and taxes.
When a company reports financial results that are much better than analysts have predicted, a round of estimate increases will follow and this can support higher share prices. Mark Hulbert has crunched the numbers to identify companies that are likely to show the biggest surprises (link) during the economic recovery.
Related:15 momentum stocks expected to show the best sales growth over the next two years, including Carvana, Tesla and Palantir (link)
Central bankers prop up 'reckless' financial firms
From Project Syndicate, Mohammed El-Erian explains the disruptions -- including increasing income inequality -- caused by the Federal Reserve's and other central banks' efforts to help economies through periods of crisis. Here's what he thinks should be done to correct these policies (link).
Think big pharma is overpaid? Read this
Brett Arends points out that large-cap pharmaceutical and biotechnology stocks have underperformed the broader market over the long term, as you can see above. This runs counter to the idea that these companies are being overpaid to develop medicines (link).
The case for AMD
Michael Brush compares Advanced Micro Devices Inc. (AMD) to various competitors and concludes that the stock's recent pullback is an opportunity for investors (link).
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-Philip van Doorn; 415-439-6400; AskNewswires@dowjones.com
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06-12-21 0833ETCopyright (c) 2021 Dow Jones & Company, Inc.