• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Investing US inflation remains elevated but falling – time to buy equities?
Investing

US inflation remains elevated but falling – time to buy equities?

by December 13, 2022
by December 13, 2022 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

The most-awaited US November inflation report was just released a couple of hours ago. It showed that inflation, while elevated, is falling.

Financial markets have waited for the report to prepare for what the Federal Reserve will say and do tomorrow when the FOMC Statement is due. Also, there are no more economic releases to move financial markets until January after this week ends.

Therefore, the November inflation report weighed on all markets, particularly the US equity market.

Details of the US November inflation report

The market expected the annual inflation to be 7.3% in November. As such, the 7.1% release is evidence that, while elevated, inflation is falling.

It gives the Fed the green light to slow the pace of its rate hikes. Also, the elevated level (i.e., still well above the Fed’s target) justifies the 50bp rate hike expected to be delivered tomorrow.

The most telling part of the US inflation report released today is that core goods are in disinflation mode while services remain sticky. For example, new vehicle prices remained flat for the month, but the prices of used cars and trucks dropped by -2.9%.

Also, energy commodities prices, such as gasoline, declined by -2.0%. So, how did the stock market react in this context of elevated inflation but falling?

Stocks loved the report, and Dow Jones surges

The equity market loved the report, as reflected by the Dow Jones gaining close to 1,000 points immediately after. With this move higher, the Dow made a new higher high, a typical development in a bullish trend.

Dow Jones chart by TradingView

After bottoming in October, stocks recovered most of the lost ground. For the Dow, the next critical level is a move above the previous higher high of the bearish trend that dominated the trading year.

More precisely, a move above 35,500 would put the Dow in a straight line in an attempt to the all-time high levels posted last January. Given that today’s report is bullish for stocks, one should not be surprised to see the Dow much higher in the days to come, especially if a Santa rally materializes.  

The post US inflation remains elevated but falling – time to buy equities? appeared first on Invezz.

You Might Also Like
  • Jim Cramer sees more upside in the Etsy stock
  • Dogecoin drops 10% after Elon Musk’s Twitter CEO poll
  • Protests erupt across China: are Chinese stocks still investable?
  • Fed’s preferred inflation gauge eases to 6.0%: time to turn bullish?
Share
0
FacebookTwitterPinterestWhatsapp

previous post
These Are the Good Old Days
next post
Stock market soars as inflation comes in below expectations

You may also like

Wide, flat SPX Diagonal Spread

January 16, 2023

Sell Manchester United stock ahead of earnings. Here are the...

December 8, 2022

Volatility Skewness | IV Skew In Options

April 13, 2023

This retail stock is ‘safe haven’ for recession: Piper Sandler’s...

December 23, 2022

Short Gamma vs. Long Gamma

January 27, 2023

GameStop trends ahead of earnings. But this Wedbush rating spells...

December 7, 2022

Options Trading Strategy: Bull Call Spread

May 9, 2023

Long Call Option Strategy

October 8, 2023

CBI says the UK is in a “short and shallow”...

December 5, 2022

Cramer recommends caution as stocks rally on inflation data

December 13, 2022

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • How to Find Compelling Charts in Every Sector

      July 10, 2025
    • White House accuses Powell of mismanaging Federal Reserve, citing headquarters renovation

      July 10, 2025
    • Italian chocolate giant Ferrero to buy Kellogg’s Froot Loops maker

      July 10, 2025
    • OpenAI to release web browser in challenge to Google Chrome

      July 10, 2025
    • Sports executive charged with bid-rigging in Texas arena project

      July 10, 2025

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 3,631 views
    • 2

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,919 views
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,607 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,577 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,451 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,171)
    • Investing (538)
    • Stock (2,662)

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 2

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • How to Find Compelling Charts in Every Sector

      July 10, 2025
    • White House accuses Powell of mismanaging Federal Reserve, citing headquarters...

      July 10, 2025
    • Italian chocolate giant Ferrero to buy Kellogg’s Froot Loops maker

      July 10, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,171)
    • Investing (538)
    • Stock (2,662)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Nike stock up 12% on Q2...

    December 20, 2022

    European Central Bank says Bitcoin is...

    December 1, 2022

    Core Scientific reveals $434 million loss...

    November 23, 2022
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here