After the CPI data was released last week, it showed that inflation was in conflict with market expectations. It was a good thing that CPI fell beyond expectations, but the core CPI did not exceed expectations. Although it fell, it did not meet market expectations, resulting in ambiguity in the market last week.
I discussed the composition of American CPI with you during the live class. Simply put, the composition of American CPI can be divided into two parts,In previous years, it was not necessary to treat it differently, but now CPI is the focus of the market, and the change of the market may come from a small part of the data falling short of expectations, so it is more practical to treat it differently.
These two parts of CPI can be understood as commodity CPI and core CPI. If the core CPI is searched on the Internet, it will be explained in detail. Simply put, CPI composed of factors with lower elasticity, such as wages, rents, services, etc., because this kind of inflation has a greater relationship with people (individuals always want to maximize benefits, wages only rise but not fall, rents are the same), so it is easy to rise but difficult to fall.
It is not easy to suppress it, and even economic recession is needed to break the market. Commodity CPI is directly related to commodity prices, such as energy, food, etc. This kind of CPI comes and goes quickly, because commodity prices always rise and fall, and even when commodity prices keep falling, this part of CPI can be negative, which lowers the average CPI.
So the current inflation problem,It depends on whether the core CPI can effectively decline, because the elasticity of the core CPI is low and it is difficult to decline. Once the commodity CPI rises again, the overall inflation expectation of the market will rise again, which is the reason why the market is elusive at present.
If the core CPI does not fall, the rate hike will last or the high interest rate will last longer, so the recession may come more quickly, which will lead to the stock market falling. Although printing money can save the market, during the recession defined by economists, the US stock index all fell, only by the magnitude. And the stock market without a sharp decline is difficult to cause the Federal Reserve to print money to save the market
Therefore, for the US stock index at present, the recession is like a time bomb, which is dismantled OR detonated. It depends on the subsequent CPI decision, and it will be known in the second half of the year. Big things are easy to happen before the US election, so everyone needs to pay more attention to the current data and trends.
Pay attention to the peak gold price
The pulse market of gold peaked at around 2065, close to 2100. Friday's sharp drop shows that the market is very cautious about this position.
I don't think the price of gold will soar. To break through 2100, it needs sufficient correction and news cooperation. Technically, we should still pay attention to whether the 20-day moving average has been broken. After stepping back on the 20-day moving average last Friday, we stopped the decline, indicating that the tracking curve is still valid, so its breaking is a sign of short-term bearish gold price. Pay attention to it.
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