As crypto crumbles in light of a possible FTX implosion, stocks rallied yesterday after new CPI data suggests that inflation is on a downtrend.
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The S&P 500 index closed 5.54% higher than the day before, going against the grain of many other markets.
This showed renewed confidence in the stock market and that inflation will likely cool in time to come.
According to the CPI data, CPI is up 7.7% YTD, down from 8.2% in September.
https://www.bloomberg.com/news/articles/2022-11-10/us-core-cpi-slows-more-than-forecast-gives-fed-downshift-room
This is good news for the markets as it shows that economic tools used by the Federal Reserve are probably working.
Wall Street ends lower after midterm election, CPI in focus The S&P 500 declined 2.08 per cent to end the session at 3,748.58 points. Read more at straitstimes.com.
However, we should not celebrate yet. It takes two points to draw a straight line, and I am sceptical of whether this drop in CPI will be a continuous trend.
Looking at the broader picture, inflation is still high, and median-income households suffer. Rent remains elevated, and many essentials like groceries and gas are priced at a premium.
Inflation is still a far cry away from the Fed's goal of 2%, and a lot of work still needs to be done.
Stock market news: Dow, S&P 500 and inflationBy Paul R. La Monica and Alicia Wallace, CNN Business Published 1214 GMT (2014 HKT) November 10, 2022 What we're…
On the other hand, NY Federal Reserve President, Bill Dudley, told CNN that he expects the Fed to slow down the rate hike increases, a sentiment echoed by many investors.
So what can we do?
I am continuing to tighten my budget and double down on saving more.
Finding good deals on essentials continue to be the primary focus. But, at the same time, buying in bulk and storing for the long term seems to be the best move thus far.
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