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Wall Street: Rock-solid confidence with inflation


(CercleFinance.com) – US equity markets should open higher on Friday morning and head for a fourth consecutive week of growth following the publication of new reassuring inflation figures.

Half an hour before the opening, the futures contracts on the major New York indices are advancing from 0.5% to 0.6%, announcing a continuation of the favorable trend initiated this week.

Even if the euphoria of the last few days is starting to run out of steam, investors continue to bet on an ebb in inflation after the statistics published early in the morning.

According to the Department of Labor, import prices fell by 1.4% in the United States in July sequentially, after rising by 0.3% in June.

Excluding the 7.5% drop in fuel prices, these prices still fell by 0.5% last month.

These statistics confirm the good surprise linked to the slowdown in inflation observed yesterday in producer prices and especially in the consumer price index published on Wednesday.

This deceleration is leading investors to hope for less aggressive monetary tightening from the Fed, which has made it its mission to rein in inflation.

‘A ‘dovish’ reversal remains possible in the medium term”, thus recognize the analysts of NN IP in a note released in the morning.

Stakeholders have yet to take notice of the first estimate of Michigan’s Consumer Confidence Index, a closely watched barometer of household sentiment, which may have picked up in August on the back of lower oil prices. essence.

Over the week as a whole, the Dow has so far gained 1.6%, the S&P 500 has risen by 1.5% and the Nasdaq has taken around 1%.

As for the VIX volatility index, it has continued to fall over the last 10 days to return below the symbolic threshold of 20 points.

The yield on 10-year Treasuries, another barometer of market sentiment, is falling again, to less than 2.85%, as falling inflation expectations fuel the prospect of the Fed slowing its rate hikes.

The session was also marked by a relapse in oil prices, the imbalance between supply and demand having returned to the forefront of market concerns with the threat of a possible recession.

US light crude (West Texas Intermediate, WTI) is currently losing 1.3% to $93.4.

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