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@Bunifa Latif：$DJIA(.DJI)$ Biggest weekly drop in more than a month on higher-than-expected US inflation data The US stock market slipped on Friday, after a higher-than-expected reading on inflation. The report didn't give investors hope that the Fed will become less aggressive in lifting interest rates soon. · The Dow Jones Industrial Average dipped 305 points, or 0.9%. The S&P 500 dropped 0.7%, while the Nasdaq Composite also fell 0.7%. For the week, the Dow, the S&P 500, and Nasdaq fell 2.8%, 2.4%, and 4%, respectively. · The producer price index rose 7.4% year over year in November, above the expected 7.2%, but below October’s 8.1% gain. A slower increase in companies’ costs means firms will increase prices at a slower rate, keeping overall inflation on the decline. Markets, however, want to see inflation falling fairly quickly. · Tuesday’s Consumer Price Index (CPI) release will be more important than Friday’s data, but any indication that prices remain elevated and that inflation is more sticky than currently believed, is a negative for markets. · That risk was seen in the bond market Friday. The two-year Treasury yield, a barometer for expectations about the federal funds rate, inched up to 4.328% from 4.257% just before the inflation data hit the wires. · The market will likely experience gyrations back-and-forth for some time until inflation gets close to the central bank's target of 2%. Plus, the impending economic—and earnings—damage from already-higher rates has yet to be seen. · European equities trimmed their first weekly drop in eight, ahead of a slew of crucial central bank decisions this week, including the European Central Bank meeting. The Stoxx Europe 600 gained 0.8%. Despite Friday’s move higher, European stocks fell for the week, ending a recent streak of gains that saw several benchmarks enter bull market levels. · Economists predict the European Central Bank will raise interest rates twice more in its struggle with unprecedented inflation, including a smaller half-point hike next week. Borrowing costs will be lifted by the same amount at February’s meeting, meaning the deposit rate will peak at 2.5%, according to analysts polled by Bloomberg. · Asian equities gained Friday as reopening moves in China kept overall sentiment upbeat. Analysts, however, caution that infections are likely to surge as a result, delaying a swift reopening of the economy. · Hong Kong’s Hang Seng Index climbed more than 2%, leading gains in the region, while gauges in Japan and Taiwan advanced more than 1%. · Singapore stocks followed their regional peers on Friday to end a largely negative week on a positive note after modest overnight gains on Wall Street. The benchmark Straits Times Index was up 0.3% to 3,245.97. @TigerStars DYODD Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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