💣Inflation is scorching once more🔫

The stock market suffered a rout as inflation figures came in higher than expected. This gives the Fed pull the engine to step on the pedal of lifting the interest rate. The sell-off deepens as the trading continues. 

The past optimism of the inflation peak suddenly evaporated as market participants were nervous about the Fed’s tightening cycle. The falling price pressure appeared to be pretty short-lived. 

Some analysts are betting on even a full percentage rate hike increase. It will be an unprecedented move. The 2-year Treasury yield responded soundly as it hit a 3.75% high. The US Dollar Index naturally move higher as higher bond yield makes holding the greenback more attractive, pulling global capital to the dollar. 

🎯Cracks are forming in the market💸

Indeed, as Pika World continue to DCA into an index fund, we are also mindful that the worst might not be over yet. Yesterday saw S&P 500 falling below its 50-day moving average as traders appear to be less confident in purchasing stocks at the current price level. It almost reached the 3900 level, where buyers were seen to step in and push the index higher. 

🕹Producer Price Index (PPI) up next🔭

Today we will also receive an essential fundamental indicator of Inflation: the PPI. We will also gain insight into Michigan’s consumer sentiment survey on Friday. These are critical data to help us map out the possibility of underlying inflation strength and consumers’ responses to them. 

Indeed, the PPI is somewhat a forwarder indicator as it shows the change in the price of products by manufacturer, and it could directly feed into the end price sold to consumers. Inflation appears to have also been spread toward other spectrums of the economy, such as services which is a worrying sign as they could be stickier. 

✏️What’s on the menu today?📦

At 8.30 pm, we will receive the monthly Core PPI for August. On a monthly basis, we expect a decline of 0.1%, a much smaller decline from the fall of 0.5% in the prior period.