This week was marked by the rally on Thursday as stocks recorded their best session since the early days of the pandemic in 2020. S&P 500 closed out the session up 5.5%, respectively, while Nasdaq Composite jumped 7.4%. U.S. government bond yields also recorded their steepest one-day decline in more than a decade, with the rate on the 10-year Treasury falling 32 basis points to 3.82%.
Consumer Inflations Data was positive. 0.3% m/m rise, compared to forecast 0.5%. Or core CPI 6.3% on an annualized basis. The headline CPI figure, which factors in volatile food and energy prices, climbed 7.7% y/y (expected 8.0%). 8.2% in the the previous month.
The market are waiting the point where inflation start to decline, the anticipation is that those number will give Fed more room in terms of slowing down the pace of its aggressive rate hikes.
Also take into account that the US elections are over and as we all know politics before elections are not same like after elections, there is maybe some anticipation that there not not so much pressure in the US government to fight inflation at any costs.
However the mid term trend is still full of negativity.
- The Fed has to keep raising to lower the inflation down to targeted 2%
- The inflation in EU is by much worthier with 2 digits numbers.
- Germany’s governments Bond’s are still very volatile. DE10Y Yield raises more than 7,5% on friday indicating possible pivot next week.
- Not to forget the FTX problems sending tsunami waves ove the whole crypto market, redistributing a lot of money right now.
Stay careful! Happy investments!