Wall Street’s three main indexes advanced last week as signs that inflation may have peaked in July increased investor confidence that a bull market could be underway.
The U.S. reported that the Consumer Price Index rose by less than anticipated in July, up 8.5% YoY, while the Producer Price Index posted a similar outcome, rising by 9.8% YoY in the same month.
Because of this, investors expect a less hawkish Fed, and there is a big chance that Fed policymakers could decide to raise rates by 50 basis points when they meet in September, instead of 75 basis points. Tim Ghriskey, the chief investment strategist at Inverness Counsel in New York, said:
I wouldn’t declare victory over this bear market yet. There’s likely some bad news still out there, but there’s a very good chance we’ve seen the bottom.
The U.S. stocks recorded their largest weekly inflow since December last year, and according to Bank of America, investors have bought $7.1 billion in equities in the week to Wednesday.
Strong corporate earnings also influenced the market positively, and results from many big companies provided a strong start to the third quarter of the 2022 year.
The S&P 500 companies posted year-over-year earnings growth of 9.7% in the April to June period, much stronger than the 5.6% predicted at quarter-end.
The upcoming week will be busy; The Home Depot, Walmart, Cisco Systems, The Estee Lauder Companies, Applied Materials, and Deere & Co are among the companies scheduled to report quarterly results.
The U.S. will also publish Retail Sales figures for July, and the U.S. Federal Reserve will release the Minutes of its latest monetary policy meeting.
