Hey folks, I hope you are enjoying the weekend. Markets got an inflationary scare this past week and even with the strong finish on Friday into close we still finished down on the week. Is this a sign or more volatility to come? Get me take in this week’s round up below.
WEEKLY SOUND BITES;
- Major indexes slipped back from record highs as investors confronted stark signs of higher inflation, but a late rally moderated the week’s declines… At its low point on Wed. NASDAQ was down 8.5% from its intraday April 29 peak, still above the widely accepted 10% threshold for a correction…
- On Wednesday, the S&P had its worst day since Feb. 25—and the Dow had its worst since Oct. 28—after the Labor Department reported that core (excluding food and energy) consumer prices jumped by 0.9% in April, the most in four decades and roughly triple consensus estimates…The headline consumer price index (CPI) rose 4.2% over the 12 months ended in April, exceeding forecasts for a 3.6% increase. Producer prices, reported Thursday, rose 0.6%, roughly double expectations…Stocks recovered some momentum on Thursday, however, seemingly helped by a bigger-than-anticipated drop in weekly jobless claims to another pandemic-era low of 473,000. April retail sales, reported Friday, were flat for the month, but that followed a March sales surge that was revised higher, to 10.7%.
- Fed officials made repeated assurances that inflation data would not prompt any sudden shift in monetary policy…And Fed Vice Chair Clarida acknowledged being surprised by the morning’s data, but he stated that a temporary surge in inflation remained “entirely consistent” with the Fed’s goals…this helped ease market concerns about a chance in Fed interest rate policies… The bond market seemed to take its cue from the Fed, with the yield on the benchmark 10-year U.S. Treasury note increasing but staying well below its late-March highs.
- Shares in Europe also fell with global markets amid signs of accelerating inflation, stoking fears that interest rates could increase… The European Commission revised its economic growth forecasts to 4.3% for 2021 and to 4.4% for 2022—an increase from previous estimates of 3.8% in both years. Rising vaccination rates, the prospect of lockdowns easing across the region, and improving export demand prompted these upward revisions…UK gross domestic product in March grew a stronger-than-expected 2.1%…
- Chinese stocks rose strongly for the week… On the economic front, auto sales increased for the 13th straight month in April, rising 8.6% over a year ago. China’s producer price index jumped 6.8% in April, the largest gain since 2017, as raw materials prices surged…
Enjoy This Week’s Round-Up;
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