Dear New World Investor: The shutdown-delayed September Consumer Price Index rose 3% year over year, up a tenth from 2.9% in August but slightly below consensus expectations for a 3.1% increase. It was the highest reading since May, but much of the gain was in food, gasoline, and energy. So the core CPI rose 3% year over year in September, down a tenth from 3.1% in August and below expectations. On a monthly basis, core prices increased 0.2%, below August’s 0.3% gain, which was the strongest monthly rise in six months. In general, tariffs are still pushing up goods prices...

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Akebia Therapeutics (AKBA) announced this morning that in their Type C meeting with the FDA, they learned that the Agency would require “a significantly larger number of patients than proposed, and accordingly would require meaningfully more time and cost to complete.” Therefore, they are not going to pursue a broad non-dialysis chronic kidney disease (NDD-CKD) label for Vafseo. But: “We were encouraged by the discussion with FDA on smaller subgroups of CKD patients where we may be able to align on a potential clinical trial design and path forward.” Given CEO John Butler’s history of winning against the FDA, I...

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Dear New World Investor: NO ISSUE NEXT WEEK! You can call it summer vacation, but we call it finally moving to our Cathedral Trees Sanctuary natural burial ground. July’s Consumer Price Index had either something for everyone or nothing for anyone, depending on your bias. The headline year-over-year number was +2.7%, the same as June and a tenth under the +2.8% expected. The month-over-month change was +0.2%, as expected. So the rate of inflation didn’t increase even with a large amount of tariffs and was below expectations – good news. But inflation stayed firmly above the Fed’s +2.0% target –...

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Dear New World Investor: June quarter real GDP was reported Wednesday morning up +3.0%, above the +2.6% consensus. Click for larger graphic h/t Yahoo Finance I’ve been talking about this “surprising” strength for weeks, so I hope you weren’t surprised by that – Fed Chairman Powell certainly wasn’t. The Fed held the Fed funds rate range unchanged at 4.25% to 4.50%, although two Fed Governors voted in favor of a 25-basis-point rate cut, the first dissent by two Fed governors since 1993. Powell said the obvious: “Although swings in net exports continue to affect the data, recent indicators suggest that...

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Dear New World Investor: At the top of each Friday’s Boomberg on Substack I repeat an important note: “Stocks peak about every 36 years, most recently in 1929, 1965, and 2000. This 36-year cycle can be traced all the way back to the earliest eras in recorded human history, back to Pythagoras and Plato and the Axial Age around 600BC. After each peak comes a period of decline (punctuated by bear market rallies) that typically lasts 16 years or so. Then, with the excesses of the prior bull period wrung out and investors most depressed, the next 20-year run to...

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Dear New World Investor: There are two things I realized about President Trump before his first term started in 2016: 1. In a complex situation, he likes to shake everything up, see where things land, and then decide what to do next. 2. He actually follows The Art of the Deal:      a. Make a ridiculously large ask      b. Pay attention to how loud they squeal      c. Reduce the ask as necessary to get more than what you wanted in the first place It’s not “nice” and certainly not subtle, but it seems to work over and over....

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Dear New World Investor: My Rocket Lab recommendation had a rocky start but now is working well and has a long way to run. Redwire also is off to a rocky start and isn’t nearly as interesting as RKLB, but it also seems bound to be a money-maker as the space economy grows. What I’d really like to recommend is the #1 space company, SpaceX. SpaceX has grown rapidly through four businesses. They are (1) a reliable, low-cost way to put satellites in orbit, so they have a large, growing commercial launch business. SpaceX is the first company ever to...

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Dear New World Investor: “Space – the final frontier. These are the voyages of the starship Enterprise – its five-year mission to explore strange new worlds, to seek out new life and new civilizations, to boldly go where no man has gone before.” And so William Shatner, speaking as Captain James T. Kirk, opened the first episode of the original Star Trek in 1966. Eleven years later, George Lucas’ Star Wars opened to packed theaters. Since then, progress in space has been steady if not spectacular, transitioning from huge government programs to private companies like SpaceX and Rocket Lab. Like...

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Dear New World Investor: AI stocks are getting pounded today due to the Chinese company Deepseek releasing an open-source AI model that’s much less expensive than OpenAI, Llama 2, or any of the other major competitors. What the market is missing is that this is all massively bullish for the AI supercycle. Deepseek just improved efficiency dramatically and every other top Large Language Model will adopt Deepseek’s methods and improve their models faster, and do it all with more efficient use of compute power. That means better AI apps and AI agents are coming sooner, faster, and better than previously...

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Dear New World Investor: NOTICE: No newsletter next week, as unlike days of yore nothing much happens during Thanksgiving week. The day after Thanksgiving used to be a major tell for the next market move – now it’s a nothingburger. I’ll be back on December 5, more than ready for the Santa Claus rally. In the near term, I expect inflation to continue to slowly fall – in large part because I still think a brief, shallow recession is coming. But two years from now I think inflation will be higher as Trump tries to undo many of the policies...

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