Good News On Inflation Boosts Stocks For Third Straight Week
Published Friday, November 17, 2023 at: 9:32 PM EST
The post-pandemic inflation era appears to ending. While it was scary and threatened to wreck the economy, evidence of its passing is strong, and it is likely to be little more than a blip in American economic history.
The Federal stimulus legislation of 2020 and 2021 that followed the partial shutdown of the economy and oil price spike of 2022 were met with the most aggressive monetary policy in modern times. It worked. The inflation scare of the early 2020s has been a lot less destructive than the major inflation spike of the 1970s and 1980s.
From a nearly 8% annual rate in October 2022, the Consumer Price Index measure of inflation fell to 3.2%, the U.S. Bureau of Labor Statistics said Tuesday, November 14. Excluding volatile energy and food expenses, the “core” CPI dropped from more than 6% to about 3%.
The monthly rate of change in the CPI in October on an annualized basis was 0.5% — below the Federal Reserve’s 2% target rate. This is good news because the low inflation rate is occurring as the economy is projected to grow by about 2% in the fourth quarter, according to two independent algorithms created by the Federal Reserve Bank branches in Atlanta and New York City. To be clear, the Federal Reserve’s 11 interest rate hikes since March 2022 has brought inflation under control without causing a recession.
For the third consecutive week, the stock market rose on good news about the economy. The Standard & Poor’s 500 stock index closed Friday at 4514.02, up +0.13% from Thursday, a gain of +2.24% from a week ago. The index is up +101.75% from the March 23, 2020 bear market low and down -5.89% from its January 3, 2022, all-time high
The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is a market-value weighted index with each stock's weight proportionate to its market value. Index returns do not include fees or expenses. Investing involves risk, including the loss of principal, and past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted.
Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances. The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions. This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.
- U.S. Investor Picture Of The Week
- The Conference Board Backs Off Its Recession Forecast
- Softening Economic Data, Inflation Fears Dampen Stock Rally
- S&P 500 Closes Above 5000 For The First Time Ever
- Why America Is The World’s Economic Leader
- Investment News For The Week Ended Friday, January 26
- Why Stocks Broke The All-Time Record High
- A Strategic Update, With Stocks Near All-Time High And Crises Unfolding
- 2024 Begins With Positive Economic News