Connect with us

Hi, what are you looking for?


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

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 lower 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.

Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like


    Reprinted from the Future of Freedom Foundation President Biden’s campaign to banish (or maybe outlaw) political paranoia took a wallop last spring. In April,...


    Inflation appears to be on the decline. The Personal Consumption Expenditures Price Index (PCEPI), which is the Federal Reserve’s preferred measure of inflation, grew...

    Editor's Pick

    It’s already a cliché, but technology is rapidly improving. And for many businesses, it’s hard to catch up. However, it’s not just the average...

    Editor's Pick

    At Broadband World Forum 2022, Fibocom launched 5G module FG370 based on MediaTek T830 platform, aiming to empower the deployment of 5G FWA for...

    Disclaimer:, 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 © 2022 All Rights Reserved.