Never worry about tomorrow because each day has enough worries. Yesterday was a Day of Silence for the Wall Street Market waiting to see the direction that the market will take after the release of “CPI” data. In another view, investors had foreseen a volatile day and sure to their word it was a volatile trading session. Especially because the Labour department released the data before the bell was rung.
At one point, Dow Jones slummed 600 points coupled with minor rises. Eventually finishing at 35, 241.59 losing 526 points (-1.47%). Furthermore, according to DJI market data, yesterday was its lowest point since Jan 18. Also, the S&P declined by 83 points (-1.8%) ending at 4,504.08. Even Nasdaq lost 304 points (-2.1%) closing down at 14,185.64.
“CPI” data that was shared on Thursday; reported what most of us knew but failed to admit. A 7.5% inflation rise of the last 52 weeks, which happens to be the highest in the last 40 years. The report clearly outlined that prices for food hiked by 0.9%. Also, prices for electricity shot by 4.2% compared to natural gas and gasoline.
January alone recorded a “0.6% CPI increase”. Those numbers came from certain factors such as a 0.5% rent increase, the highest since May 2001. Moreover, surge in prices of household furnishings, airline fares combined with a 0.7% increase in healthcare. All these readings are pointing us in one inevitable direction; the FED will increase interest come next month.
No wonder, James Bullard the President of St Louis Federal Reserve Bank noted that he is anticipating the rate of fed-funds to jump by 100 BPS/1% before 1st July. Nevertheless, let us wait and see if those remarks will be stamped by Central Bank in their next 3 policy meetings. Bullard shared his thoughts through a television interview that was carried out by Bloomberg Television.
The volatility of Thursday’s trading sessions prompted investors to find comfort in investing in treasury bonds. That was the reason behind the over 2% yield of the 10-year Treasury note, which had a 1.5% reading during the beginning of the year. Also, the “2-years treasury note” harnessed over 26 basis points (0.01% rise), which happened to be its highest “one day leap” since August 2019; Tradeweb revealed.
Due to fate, the tallest trees receive the highest amount of rainfall, also they are the most vulnerable victims of lightning in case it happens. Likewise, Thursday’s tumbling rally didn’t spare high-profile companies of NYSE. Apple (AAPL) declined by 2.34% to $172.16 per share while Alphabet (GOOG) fell by 2.02% to $22, 772 per share. Elsewhere, Coca-Cola and Disney rose by 0.5% and 3.4% each after sharing positive quarterly earnings.
Now that the long-awaited “CPI” is out and the “earnings report” season is almost over; what will be the key driver of the Wall Street industry? Our focus will be on supply & demand chains and post-pandemic behaviours. Also, in 2022, investors are closely watching the cash flow of stock companies. Thus, most probably they will put their money on “Growth Stocks” as noted by Dan Niles, portfolio manager of Satori fund via Yahoo Finance Live.
