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U.S. Stocks Hit Record Highs, Inflation Remains High

Summary

The U.S. stock market hit a record high last Friday. The S&P 500 index rose nearly 1% to close at an all-time high; the Nasdaq 100 index rose 1.1%. Dennis DeBusschere, founder of 22V Research, said that inflation data is in line with expectations "compared to previous concerns, which is good news. People thought the situation would be worse. It is certain that the inflation figure is still high, but it should reduce the market's need for the Fed. To curb economic worries.

US consumer confidence has improved, an indicator showing that confidence has rebounded from a 10-year low hit in November. Independent Advisor Alliance Chief Investment Officer Chris Zaccarelli said that we believe that the stock market will continue to rise because consumer spending remains strong and corporate profits continue to grow for the time being. However, inflation, interest rates and Fed policies will all change faster than in the past. Volatility may rise in 6-12 months. The most important thing investors can do is to stay diversified and not to rely too much on any one area.


Commonwealth Financial Network global investment strategist Anu Gaggar pointed out that the US inflation data will strengthen the Federal Reserve’s determination to accelerate the reduction. Given the strong economic recovery, it is time to withdraw these support. Peter Chatwell, director of multi-asset strategy at Mizuho International, said that the market's subconscious reaction is that the CPI has not reached 7%. But the numbers are still very high, especially the core CPI trend, which may cause the Fed to accelerate the underweight. Therefore, the stock market may not be able to hold these gains.


This week (the week of December 13-19), inflation indicators such as PPI data in the United States and the United Kingdom, and CPI data in the United Kingdom, Canada and the Eurozone have also received attention. As for the central bank, the Fed will usher in its last monetary policy this year. At the same time, major central banks including the Bank of England, the European Central Bank and the Bank of Japan will announce their interest rate resolutions this week. In addition, OPEC and IEA will respectively publish their monthly crude oil market reports.


Fed Chairman Powell is expected to confirm this week that compared with the plan a month ago, it will speed up the reduction of bond purchases. He may even hint that if inflation continues to stay near a 40-year high, he may be open to raising interest rates earlier than expected. The outlook of other central banks is not so clear, marking the end of the basically consistent global steps in the face of the economic recession caused by the epidemic in the past two years, and the fact that many major economies have experienced a stronger-than-expected rebound in inflation.


① On Monday (December 13), OPEC announced its monthly crude oil market report.

② On Tuesday (December 14), the UK’s November unemployment rate and October’s three-month ILO unemployment rate, the US’s November PPI and IEA released monthly crude oil market reports.

③ On Wednesday (December 15), the National Bureau of Statistics released data on industrial added value, total retail sales of consumer goods, fixed asset investment in November, PPI, CPI and retail price index data in the United Kingdom in November, and retail sales and import prices in the United States in November Index data, Canada’s November CPI, and the National Bureau of Statistics released monthly reports on residential sales prices in 70 large and medium-sized cities.

④ On Thursday (December 16), New Zealand’s third quarter GDP, Japan’s November merchandise trade account, Australia’s November unemployment rate, the Federal Reserve announced interest rate resolutions, and announced a summary of economic forecasts, Federal Reserve Chairman Powell held a press conference, and the United Kingdom The Central Bank announced interest rate resolutions, the President of the European Central Bank delivered a speech, the Bank of England announced interest rate resolutions, and announced meeting minutes, the central banks of Switzerland, the Philippines, Norway, Turkey, and Indonesia announced interest rate resolutions, and the governors of the central banks of Canada, Australia, and South Korea delivered speeches.

⑤ On Friday (December 17), the British December Gfk consumer confidence index and core retail sales data after November seasonal adjustment, the German December IFO business climate index, the Eurozone November CPI annual rate, and the Bank of Japan announced interest rate resolutions.


Risk Warning: The above content is for reference only, and does not represent JRFX’s position. JRFX does not assume any form of loss caused by any trading carried out in accordance with this article. Please consult your financial planner for your investment portfolios and manage your own risk.


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