Stocks Surge Amidst Weaker Inflation Data

The market hasn't cooled down yet since Thursday's CPI press release. The CPI is a consumer price index that measures changes in the prices of goods and services. On a monthly basis, inflation increased by 0.4% and was lower than the Dow Jones forecast of 0.6%. Inflation increased by 7.7% year-on-year and was below the estimates of 7.9%. Although inflation continues to rise, it appears to be slowing.

The immediate market reaction was significant as the US dollar weakened at the time of the report.

Nasdaq and Dow Jones gained 3.9% and 2.67% respectively. Investors welcomed the news as they expected the Federal Reserve would not raise interest rates so sharply. However, recession problems remain and the economy is not out of the woods yet.

Tech stocks are making big moves

Tech stocks rallied sharply last week as investors bet on a slight hike in interest rates. Major players include PayPal Holdings Inc., which was up 4.87% on Friday and 18.79% over the week. Shares of Match Group Inc., the owner of popular dating sites like Tinder, Match.com and Hinge, were up 5.32% on Friday and 17.18% during the week.

The biggest gain against the dollar

Major currencies and commodities also appreciated significantly. Gold was up nearly 9% over the week, while the struggling Japanese yen was up more than 6% over the week.

The EURUSD has exited the bearish trend and is reversing direction. EURUSD is the most liquid currency and has been on a downward trend since June 2021. The US dollar has strengthened this year mainly due to rising inflation. Conversely, rising inflation in Europe has not helped the euro.

The best reviews of this week

• UK CPI

Wednesday November 16th, 07:00 GMT

The UK's latest CPI came in at 10.1%, slightly above expectations of 10.0%. Compared to the second quarter, the country's GDP decreased by 0.2%, which indicates the recession of the economy. Rising inflation and rising interest rates have led to the country's longest recession in decades. The UK is the only G7 country whose GDP has not returned to epidemic levels. The Brexit movement has also contributed significantly to this and coincided with the start of the epidemic in 2020.

• CPI of the Eurozone

Thursday November 17th, 10:00 GMT.

Europe is experiencing a serious energy crisis. Inflation is on the rise and the ECB believes it has not yet peaked but is imminent. GDP increased slightly in the third quarter, but growth slowed compared to the second quarter. The ECB has set an inflation target of 2% and the current annual inflation rate is 10.7%. Therefore, the European Central Bank has a huge task to reduce the numbers. The next course is in December.