Walker Crips' Market Commentary
Relatively benign American inflation data triggers global market rally
Nearly all the price action in markets last week came in a burst of euphoric demand following the publication of relatively benign American inflation data. US inflation fell from 8.2% in September to 7.7% in October, with the details revealing that inflationary pressures were easing across the board: the pace of inflation decelerated in the property and service sectors between September and October, and there were outright declines in the cost of used cars, rent, clothing and household furnishings. One data-point does not constitute definitive evidence and, more broadly, current economic data confirms that a slowdown is underway but, nevertheless, this was enough to send markets into an epic rally. Expectations for interest rate rises in the US dropped like a stone, along with the safe-haven US dollar. US government bonds surged across the board, and five-year bonds enjoyed their biggest one-day gain in a decade. The S&P 500 stock market index had one of its best days since the start of the pandemic, rising by 5.5%. The technology-heavy Nasdaq index, which had been beaten down by the fear of rate rises, rocketed by over 7%. European stock markets surged in sympathy: the Euro Stoxx 50 index had gained over 3% by the end of the day and the UK-orientated FTSE 250 gained nearly 4%...
ASML Holding, Burberry, Disney, Hermes International, LVMH, Richemont and Taiwan Semiconductor Manufacturing Co.
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