🔥 Inflation's hot, hot, hot

What’s going on here?

Inflation nudged up by a more-than-expected 0.4% in September, as rent prices settled into a much more premium location.

What does this mean?

Temperatures might be cooling down in many countries as summer evenings turn into winter nights, but not in the US. Well, at least as far as inflation’s concerned. Prices were 0.4% higher in September than August, locking them in at 3.7% hotter than the same time last year. But at least that’s moving in the right direction, clocking in slightly below August’s 0.6% increase. And when you remove volatile food and energy prices from the mix, the resulting “core inflation” rose 0.3% – bang in line with analysts’ forecasts.

Why should I care?

Zooming in: Renting is rough.

Shelter costs like rent and mortgages were responsible for around 70% of core inflation’s rise. Now, those types of costs bleed into inflation with a lag. Landlords, for one example, need to wait until leases are up for renewal before hiking up rents. And with mortgage rates still on the up across the US, we may see a slow but steady climb for months to come, at least.

The bigger picture: High price tags look like a steal.

Not to sound all doom and gloom, but those rent rises aren’t the only issue we’re up against. Motor insurance is 20% more expensive than the same time last year, although that’s partly due to a supply shortage of cars. And when prices in general are higher than usual, shoppers are actually tempted to stock up in case everything gets more expensive going forward. That demand ramps up prices a little bit extra, making it harder for central banks to tame runaway inflation.

What’s going on here?

Footwear brand Birkenstock’s initial public offering (IPO) got off on the wrong foot, with wary investors needing more than socks to warm up to the frozen market.

What does this mean?

According to the Barbie movie, Birkenstock sandals aren’t just a comfortable choice: they’re transformative tools that enlighten a wearer to “the truth about the universe”. So naturally, investors were expecting an awakening when Birkenstock debuted on the New York Stock Exchange. Well, looks like we’re not quite in sync with Barbie Land. Birkenstock’s shares landed at just over $40 at the end of day one, below their $46 IPO price. That’s the bumpiest first-day run for any $1 billion-plus US listing in the last two years. In fact, of the over 300 big-ticket US IPOs in the past century, only 13 have done worse. So despite being the third-biggest debut in the US this year, the listing did little to reassure investors about the struggling IPO market.

Why should I care?

For markets: It’s the sole that counts.

LVMH’s less-than-luxe results on Wednesday suggested that the high-end retail industry’s recent success is tailing off. And sure, chunky sandals aren’t exactly couture, but with collaborators including Dior and Valentino, Birkenstock has at least one toe in the luxury market. But the footwear firm has the other nine spread all over: the sandals’ diverse sporters are pretty evenly split across different generations, with the typical US wearer owning three pairs. And as a business, Birkenstock is consistently growing, supported by major backers, and makes a profit – rare for a newly public company.

The bigger picture: Set a good example.

The IPO market has been stirring after a long slumber, with activity up just over a third versus the same time last year. Problem is, three-quarters of those newly listed companies are currently trading below their debut prices. If that tide doesn’t change, the dozens of private companies currently considering IPOs will be sure to twiddle their thumbs for a while longer.