Inflation may have peaked, but it is still very high
Wednesday's consumer price index report could help determine which way the market will move in the short-term. Traders will be watching to see if inflation has peaked, at least for now.
The US CPI data for the month of July will be released at 8:30 a.m. New York time and economists expect the index to rise 8.7% year-on-year. A reading of 8.7% would be lower than the previous reading of 9.1% but would still be the second highest reading in about 40 years. While lower inflation is encouraging, it might not be low enough to change the direction of the US Federal Reserve which has pledged to bring inflation back down to its long-term goal of 2% by raising interest rates, a move which can slow economic growth.
A surprise reading below 8.7% would indicate inflation is falling faster than expected and could lead to a rally in stocks, but there hasn’t been a downside surprise in the CPI reading since January 2021 when inflation was in the mid-1% range.
Consumers' expectations of future inflation are falling fast. On Monday, the Federal Reserve Bank of New York said one-year-ahead inflation expectations declined to 6.2% in July from 6.8% in June.
The views and opinions of Mooney Navigator are those of the author who is not an associated person of Moomoo Financial Inc. The view and opinions of the author do not reflect the views of Moomoo Financial Inc. or any of its affiliates. The views and opinions of the author are provided for informational purposes only, do not constitute a recommendation of an investment strategy or to buy, sell, or hold any investment in any form, and are not research reports and should not be used to serve as the basis for any investment decision. All investments involve risk including the loss of principal and past performance does not guarantee future results.
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Always Hungryy : Shares rise because of hope.
Jinmiran : Scary sia
whqqq : When the stock market rebounds, which stocks will rise? At present, I only see Singapore bank stocks. Can anyone tell me what other stocks there are?
Johnnie Worker whqqq: We can focus on Intrinsic Value, rather than drifting with the market. SG banks like $DBS Group Holdings (D05.SG)$are great companies with strong moats. Personally I prefer US storage chip $Micron Technology (MU.US)$, and banks listing in HK like $PSBC (01658.HK)$;
You can buy assets with greater profitability, but price cheaper.
whqqq Johnnie Worker: Thank you very much for your reply! Have a nice day
Johnnie Worker whqqq: No problem, have a good one