It's Friday, readers. Phil Rosen here, reporting from New York. Gloom pervades global markets this morning, following the death of former Japanese prime minister Shinzo Abe, who was shot while giving a speech in the city of Nara.
In today's newsletter, we are also covering the indicators that suggest soaring prices are coming back down to earth.
Commodities markets in particular are suggesting inflation may finally be abating. But as is often the case in these wild markets, it's a double edged sword.
Let's have a look.
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1. Commodity prices have plunged back to pre-Ukraine war levels. And that has raised hopes that inflation might be fading.
This week, oil prices slipped to four-month lows, copper plunged 30% from recent highs, and wheat has cratered 40%.
The S&P GSCI commodities index dropped to 664.15 on Wednesday — which is where it stood before Russia invaded Ukraine in February. However, it did rebound 5% Thursday to 694.34.
And traders are reacting accordingly. They forecasted inflation to average just 2.5% over the next five years, down from the 3.7% expectation reported in March.
But the drop is a double-edged sword: Investors are shedding commodities because they anticipate slow or even backwards economic growth, and banks are expecting a wave of recessions around the world.
Nobel Prize-winning economist Paul Krugman, for his part, said fears of runaway inflation are hugely overblown, and dismissed stagflation concerns too.
"Not sure people realize how dramatically the runaway inflation narrative has now collapsed," he tweeted on Wednesday. "Market expectations are way down."
You can listen to me talk about oil prices on today's episode of The Refresh from Insider.
Today's top stories
2. The death of former Japanese prime minister Shinzo Abe shocked markets early Friday. Abe, who was aged 67, was the country's longest-serving prime minister until he resigned in 2020. You can read more about Abe's legacy here — and the latest market moves here.
3. On the docket: Tata Consultancy Services Limited, Goodman Property Trust, and Wakita & Co, all reporting. Plus, keep an eye out for non-farm payroll data due out today at 8:30 a.m. ET.
4. A father who retired at 36 after amassing $1.28 million explained how he made it happen. He said investors should consider certain asset classes, types of accounts, and allocation rates when making money decisions. He shared his top seven investing tips for retiring early.
5. The chief of the IMF predicted that global growth is going to face a harder and harder road ahead. "It's going to be a tough '22, but maybe even a tougher 2023," IMF boss Kristalina Georgieva told Reuters. She cited pervasive high inflation, big interest rate hikes, and increasing Russian sanctions — and added that she couldn't rule out a recession.