Overnight we saw US stocks stage a dramatic recovery after a stronger than expected US inflation print, not something most people would have expected. Core US inflation rose to a 40-year high almost guaranteeing the Fed will deliver another large rate hike in November but the market like ourselves seemed to shrug its shoulder and say “tell us something we don’t know!” – the markets now looking for two further 0.75% rate hikes by the Fed taking them within a striking distance of 5%.
- We still believe investors are positioned for lower prices for US stocks which by definition leaves plenty of room for surprises on the upside, just as we saw overnight.
Its statistical madness to say “that’s the low” but if stocks can build on their overnight gains into next week it will start to look and feel like the worst is behind us for 2022, especially if we can see the S&P turn positive for October by trading back above 3800, only ~3.5% higher, it did that last night in a couple of hours!
MM remains bullish US equities into Christmas
Add To Hit List
