Inflationary collapse!

morning-news

Gold  1900,36
(+0,13%)

EURUSD   1,2187
(+0,11%)

DJIA  34469,50
(+3,70%)

OIL.WTI  70,055
(+14,64%)

DAX   15585,50
(+2,66%)

As we anticipated yesterday, the US consumer price index for May substantially exceeded analysts’ forecasts. However, the first reaction of the US stock market was irrational. The market began to rise and showed a new all-time high.


S&P 500

S&P 500

Yes, the backlash has already started within an hour. However, the reaction to the news is very alarming. Perhaps someone knows more than we do. Namely that despite accelerating inflation, the Fed will continue to print money. And not even hint at a tightening of monetary policy.
In this case the first reaction of the market is fully justified and rational. The US dollar is depreciating faster and faster. And there is an urgent need to get rid of it. American equities, in this case, can also serve as a value preservation tool. After all, the products and services of companies are getting more expensive. And so revenues and profits will go up.
The main thing is that it does not turn out to be another bull trap. But as practice shows in recent years, absolutely all falls in the US stock market are redeemed, and the S&P 500 Index reaches new all-time highs.
The reaction to the gold news is also telling. Its quotations have jumped. So the big gold bulls also see no hint of an interest rate hike any time soon, which could lead to a strong correction in the yellow metal’s market.
Is this good or bad for us? It is worth splitting the question into two parts here. If we are talking about traders, there is no difference. The main thing is that the price moves and not stands in a narrow corridor. And if we are talking consumers, things are very sad.
Our savings are rapidly depreciating. And deposits in banks are melting before our eyes in real terms, relative to the cost of real estate, new cars, holidays and everyday services.

13.45 ECB interest rate decision
14.30 US Consumer Price Index for May


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