What an incredible week this has been!  The US indexes closed higher following a report that inflation may be cooling.

The Dow Jones Industrial Average rose 4.15% over the past 5 days, the S&P500 shot up 5.9% for its best week since June and Nasdaq Composite closed with a unbelievable 8.1% 5 day gain.

October CPI report showed a 0.4% increase in prices over September and a 7.7% increase year over year.    The core index which excludes food and energy costs, was up 0.3% from September and 6.3% annually, which was lower than expected.

I believe that this is the best sign so far that inflation is starting to peak.  However inflation rate is still far from the Feds ' target of 2%.  If next month' s CPI report continues to show further drop in inflation figures, the stock markets will definitely continue to soar like a turbo charged rocket to the moon.

Already the markets are singing with much optimism and good cheer since yesterday.  Hopes are high that the Feds will consider pausing its interest rate hikes to give time for the effects of this year's increase to put a dampening impact on inflation.  At the very least the markets hope for a lower 0.50% increase in December and that the Feds will not bee quite as aggressive on their rate hikes.

The other important factor is the  unemployment figures. Twitter, Meta Platforms and other Tech companies are laying off massive number of  workers in November.  Meta alone has laid off 11,000 just this week.  The higher the unemployment rate is, the more chances the Feds will be less aggressive with the interest rates hikes.

Will the markets continue to rally next week?  I believe that they will.  Historically the markets rally after inflation figures have peaked.  If the following months show a distinct declining trend of lower inflation figures, higher unemployment, then the markets will certainly rally big time. 

Everything hinges on these important figures.  The other catalyst is the results of the US Mid term elections.  A divided control of  Congress with Republicans in the House of Representatives and a Democrat controlled Senate will be what the markets like because of checks and balances. 

However no matter how the markets perform, I will continue to dollar cost average into my favourite quality stocks like Apple, Microsoft  as it is impossible to time the markets.  Investing is after all a marathon, not a sprint. 

@Tiger_chat  @CaptainTiger  @MillionaireTiger  @TigerStars