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The vast majority of retail client accounts lose money when trading CFDs.
Important Notice - Fraud awareness
Important Notice - Scam alert
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
Important Notice - Fraud awareness
Important Notice - Scam alert
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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Is This a Low for the US Stock Market?

The US stock market saw a volatile day on Thursday but managed to vault above the 30,000 level for the close. 

The US inflation picture worsened over the last month, but the Dow Jones US30 index found a rally after the data. 

US30 – Weekly Chart

us30 chart

The previous lows were in June at the 29,650 level, and there is a chance of follow-through after an early October bounce. 

Consumer prices rose more than forecast last month, another sign that US inflation is still ongoing. Inflation was 8.2% for the year to September, down from 8.3% in August. 

Despite the drop, the figure was still higher than forecast despite aggressive rate hikes from the Federal Reserve. Interest rates are still well above the central bank's 2% target, so the Fed will have to continue raising rates at their next meetings.

"The Fed needs to react at the next meeting and keep policy tight until there is some sign that inflation is under control," said Neil Birrell, CIO at Premier Miton Investors. 

"This print raises uncertainty and is bad news for the economy and consumers. The peak in interest rates will, in all probability, be higher now. It's difficult to find any positives in this for the economy or markets." 

Prices have dropped back from a peak of 9.1% in June, helped by lower fuel prices. But steep increases have been seen in grocery prices and medical costs. Taking food and energy out of the equation saw inflation at 6.6% - the fastest pace since 1982. 

Friday brings retail sales for the US economy, and a better-than-expected number could extend the rally. Traders will be looking at a potential peak in inflation and will look to find bargains in the market at these levels. Retail sales are expected to dip from 0.3% to 0.2% as consumers feel the pinch of higher prices. 

After criticism abroad, US Treasury Secretary Janet Yellen said the US was "attentive" to global concerns, but domestic issues would guide policy. 

"Our path forward begins with the jobs we have to do at home," she said. "In the United States, our top economic priority is to bring down inflation while maintaining a strong labour market." 

Australian Treasurer Jim Chalmers warns US Federal Reserve chairman Jerome Powell of the recession risks from "blunt and brutal" interest rate hikes. This stems from the increasing volume of global voices on the borrowing cost squeeze.

Last Updated: 14/10/2022

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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