On December US inflation data, prepared by Callie Cox, US investment analyst at eToro. The figures have been slightly higher than expected by Wall Street, “which could force the markets to continue backing down on the rate cut operation,” he points out. However, they emphasize that they are not worried about these data: “There is still a lot of pressure on the economy, and many price indicators register sharp year-on-year falls. The trend is going in the right direction and there are many reasons to remain optimistic about a soft landing.”
December inflation was a little higher than Wall Street expected. It appears driven by utility prices, which could force markets to continue backtracking on the rate cut operation.
To be clear, we are not worried about this latest inflation data. There remains a lot of pressure on the economy, with many price indicators recording sharp year-on-year declines. The trend is going in the right direction and there are many reasons to remain optimistic about a soft landing.
More importantly, investors' inflation expectations are also significantly lower, which should give the Federal Reserve more room to proceed with rate cuts. When and how much are still up for debate, although I would say they have already begun to some extent.
Today's trading could depend on how much value stocks can save the day. But one day it shouldn't change your opinion about this market.
Stay agile, retain quality risk, and continue to rotate cyclically. Now more than ever, however, it is important to focus on general trends in the economy.
Most importantly, remember that this is a bull market until proven otherwise. We need to see significant weakness in the labor market before worrying about the stock market. And even then, markets could respond more to rate cuts than economic concerns.
This content is for informational and educational purposes only and should not be considered investment advice or an investment recommendation. Past performance is not an indication of future results. CFDs are leveraged products and carry a high risk to your capital
Source: Territorioblockchain.com
