Us Inflation Data For November Was Good For Stocks

last updated on

Us Inflation Data For November Was Good For Stocks

US Inflation Data For November Was Good For Stocks

Finally, we have the US inflation data for the month, which showed that it was a little lower than the market's expectations. Although it showed that the inflation was still higher in November than the Fed's expectations, it was the best-case scenario when it comes to stock.

This was evident from that the sharp rally in US equities we saw during the Tuesday session. Another thing that was revealed was that the interest rates were indeed having an effect on the inflation data.

Now that inflation has started to slow down, it has also raised the hopes that the Fed will decrease its rate hike speed. In addition, the chances of a hard landing (economic) during 2023 will also become lower if the Fed slows down its pace.

Stock Investors Are Optimistic

To say that the year 2022 was not good for stock investors wouldn't be totally wrong. However, it seems that the November data has provided relief to the stock investors.

There's still a strong chance that the Fed will raise the interest rates by 50 basis points within the next few days. Overall, it would be the 5th big increase in a row. However, the investors are looking past the upcoming events and are more focused on the next 5-6 months.

According to Matt Peron (Research Director), November's inflation report was nothing short of a holiday gift. But we can't ignore the fact that inflation is still at record-high levels. However, we have started to see the lag effect of interest rate hikes finally kicking in. In fact, the next inflation report will print an even lower figure.

The US CPI report is released by the Labor Department of the USA and provides a measure of the prices of goods/services. On a yearly basis, the reading was at 7.1%, which was a 0.1% increase from the last month.

According to economists from Dow Jones, the CPI data was expected to be around 7.3% (yearly), with a 0.3% increase on a monthly basis. However, the actual result surprised everyone and resulted in a stock market boost.

Trending Stories