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Bad US inflation data wipes out four-day rally

Bad US inflation data wipes out four-day rally

Released Tuesday, 20th September 2022
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Bad US inflation data wipes out four-day rally

Bad US inflation data wipes out four-day rally

Bad US inflation data wipes out four-day rally

Bad US inflation data wipes out four-day rally

Tuesday, 20th September 2022
Good episode? Give it some love!
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Bad inflation data from the US wiped out a promising, four-day rally with such violence that new lows for the year are looming for many assets. US inflation fell to 8.3% in August from 8.5% in July, a decline to be fair, but not the decline the market was looking for. In fact, aside from the expected moderation in food and fuel prices, there were hefty gains in goods and services as diverse as new cars and trucks, vehicle repair, dental charges and hospital services. Some optimists had been hoping for signs that inflation would soon roll over: the hope was margins would fall from their current, unsustainable levels as supply chains normalise; the strong dollar and lower inflation outside the US, especially in China, would wear down import prices; rent inflation would follow the sharp drop in house prices and rents downwards, and a gradual moderation in wage gains would reduce inflation across an array of services that are sensitive to labour costs. While few doubt the logic of this reasoning, which applies both in the US and elsewhere, the inflation figures pushed out the date that this normalisation will commence. In the short-term, meanwhile, any chance of a 0.5% hike at this week’s Federal Reserve meeting has gone.


Stocks featured:

Amazon, Apple, Fedex Corp, Starbucks and Uniper



To find out more about the investment management services offered by Walker Crips, please visit our website:

https://www.walkercrips.co.uk/


This podcast is intended to be Walker Crips Investment Management’s own commentary on markets. It is not investment research and should not be construed as an offer or solicitation to buy, sell or trade in any of the investments, sectors or asset classes mentioned. The value of any investment and the income arising from it is not guaranteed and can fall as well as rise, so that you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. Movements in exchange rates can have an adverse effect on the value, price or income of any non-sterling denominated investment. Nothing in this podcast constitutes advice to undertake a transaction, and if you require professional advice you should contact your financial adviser or your usual contact at Walker Crips. Walker Crips Investment Management Limited is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange.


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