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Slower inflation, higher rates; house prices and European gas. Inflation still These days you can't get to hear enough about inflation. Late [View in browser]( [Bloomberg]( Slower inflation, higher rates; house prices and European gas. Inflation still These days you can't get to hear enough about [inflation.]( Later Friday, we will hear from the University of Michigan inflation survey, which will give us a read-out on how the person in the street expects price pressures to evolve both in the short and long run. Concerns that the Federal Reserve will have to wrestle with elevated inflation for a long time are keeping Treasury yields on the boil. But gauging inflation and inflation expectations may be an art more than a science if measuring the [price of mayonnaise]( is anything to go by. Housing slowdown? With interest rates now hovering around 5%, [existing-home sales are down]( more than 14% from last year. Some potential buyers are sitting on the sidelines until rates or prices or both decline. And in Canada,  homes could [lose as much as a quarter]( of their value as market declines set off by rapidly rising interest rates play out much faster than anticipated, according to Desjardins Securities Inc. Energy crisis The energy crisis [that’s crippled]( Europe for months could get worse with just about two months to go before the winter heating period officially begins. The region is still heavily dependent on Russian gas to get through the colder months, and any further disruptions to supply could heighten the risk of blackouts and rationing. The Rhine -- northwest Europe’s most important river [for the transport]( of industrial goods, including energy products such as diesel and coal -- [is set to]( become virtually impassable at a key waypoint in Germany on Friday, due to low water amid a scorching heat wave. The impact could linger for months, potentially driving up gas demand as a replacement. Stocks gain US[equity futures](and European stocks rose as inflation fears abated. S&P 500 contracts climbed 0.6% as of 5:50 a.m. New York time and European equities were led by travel, banks and autos. A dollar gauge headed for its deepest weekly drop since May. Treasuries steadied. Gold pushed higher and Bitcoin slipped to trade near the $24,000 level. Oil headed for the biggest weekly gain in about four months on interruptions to supply and speculation fuel switching will buoy demand. Coming up... There’s a lot of data to get through before traders can sign off for the weekend. Following the bumper inflation prints this week, we’re getting US import and export prices at 8:30 a.m. New York time. At 10 a.m. are the University of Michigan sentiment indicators, with the expectations figure in particular focus. The latest WASDE report is published by the U.S. Department of Agriculture. What we've been reading Here's what caught our eye over the past 24 hours. - Trump calls for release of [warrant documents](. - JPMorgan’s Kelly sees stocks at record highs in [three years](. - CDC says quarantine after [Covid exposure]( no longer necessary. - [Thinking too hard]( can make you tired, scientists say. - A chance to see [Serena Williams]( in US Open could cost $12,000. - A football fanatic took a [$1 billion bet]( against the game’s mega rich. - China’s [bursting housing bubble]( compounds its economic woes. And finally, here’s what Tatiana’s interested in this morning Tech stocks’ brave comeback in the past two months has pushed valuations relative to the broader market to heights that suggest the bull run may be in peril. - The S&P 500 Information Technology Index has rallied 20% from the mid-June low as of Wednesday, meeting the threshold for a bull market as inflation expectations dropped and traders dialed back wagers on aggressive Fed policy tightening. - While much of that can be seen as a bounce-back from depressed levels, the recent rally had the tech gauge trading around 23x its forward price-to-earnings multiple vs about 18x for the index as of intraday Tuesday, leaving a valuation gap of about 4.9x - Such levels have been somewhat uncommon over the past decade. Using monthly figures to smooth out the data, there have only been 11 other times since 2008 that the gap between the two was equal or larger than 4.9x, with most of those months coming in the post-pandemic boom of 2021. - And the near-term performance shows a sobering pattern. Three-month forward returns have been negative, on average, for those instances, and tech also underperformed the broader market, falling 2% vs slightly more than a 1% drop for the S&P 500. - Over a longer time frame, tech has shown more exuberance. Going back to 1990, the valuation gap was as large or larger about one third of the time - Three-month forward returns also held up better, averaging a 0.5% gain vs 0.4% for the broader market. Six months forward, it was even better: tech stocks gained 2.5% on average vs 1.4% for the S&P 500. But before taking too much comfort with the results, it’s worth noting the data are heavily skewed by the dot-com period, when forward P/E ratios by far exceeded today’s levels - But by another metric, the current equity market does share similarities to those two decades ago, as my colleague Cameron Crise has found. The “hopes and dreams” for tech -- defined as the valuation that cannot be explained by fundamentals -- was hovering around late 2000 levels in December. While it’s come down this year, it’s showing signs of revival recently - It’s also worth noting the larger macro and interest-rate backdrop. Back in March 2000 tech peaked, a few months before rates did, and then started collapsing as the economy weakened into a recession in 2001. That offers a cautionary tale for today -- particularly as inflation was nowhere near current levels - Glancing at fundamentals, tech earnings growth has decelerated this year, with semiconductors being a notable disappointment - While the average 3.2% growth for the first two quarters fared better than analysts feared, it trails the 2017-2021 quarterly average by about a percentage point - To be sure, the latest CPI report is reassuring and the Fed might not be compelled to go that much higher than traders are anticipating. Tech is also known for its resiliency with the likes of Apple recently reminding investors of the earnings power of tech giants - But Fed speakers have pushed back on markets’ dovish interpretation and warned more hikes are coming. The faltering earnings momentum and uncomfortable historic precedent should be kept in mind - NOTE: Tatiana Darie writes for Bloomberg’s Markets Live blog. The observations she makes are her own and not intended as investment advice. For more markets commentary, see the MLIV blog Follow Bloomberg's Tatiana Darie on Twitter [@tatianadarieeÂ]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. You received this message because you are subscribed to Bloomberg's Five Things - Americas newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](