To The Moon

$DJIA(.DJI)$ 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