• 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
  • This is what you should expect from U.S. stocks in Q1 of 2023
  • Nike shares rise after robust quarter results but will the stock break this key level?
  • American Airlines lifts Q4 guidance on ‘strong demand’
  • 25+ US economy statistics: forecast, trends and facts for 2023
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

Index Options vs. Stock Options: What’s The Difference?

February 17, 2023

Lloyds Bank share price forecast for 2023

January 2, 2023

Everything You Need to Know About Options Assignment Risk

February 21, 2023

UBS reveals its top apparel stock for 2023

December 8, 2022

GameStop Q3 results: ‘I’m looking in the short-term for downside’

December 7, 2022

What Are Cash-Settled Options?

February 23, 2023

MicroStrategy increases Bitcoin holdings by 2,500 BTC

December 28, 2022

Yes, We Are Playing Not to Lose!

March 11, 2024

CrowdStrike stock tanked 20% in extended trading: what happened?

November 29, 2022

Pro recommends buying Shake Shack stock despite soft guidance

January 10, 2023

    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

    What Is Delta Hedging?

    October 7, 2023

    3 global macro themes to watch...

    December 26, 2022

    Argo Blockchain shares jump 100%+ after...

    December 28, 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