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Bikini Bulls Bask in the Summer Rally?

Inflation Moderation

The latest Consumer Price Index (CPI) data for June showed a cooling of inflation for twelve consecutive months. Notably, inflation softened in areas such as food, used vehicles, and airline prices.

The year-over-year CPI metric decreased from 4% in May to 3% in June, signaling investor optimism. The Core PCE, the Fed’s preferred inflation gauge, also dropped to its lowest annual level in nearly two years, rising by 4.1% from one year ago.

Market Takeaway

July’s stock market rally extended beyond AI and tech sectors, embracing other industries and sectors. The home builders are booming despite higher mortgage rates but spurred by limited supply.

The Fed remains data-dependent and is closely monitoring labor market data and inflation metrics. While investors look for clues about the Fed’s rate hike plans, it is still too early to draw definitive conclusions.

In the long term, successful investing lies in discipline, a balanced portfolio, and a well-thought-out strategy. This is only R2Cents. Consult your financial advisor for additional assistance.

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