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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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Wavering US stock prices before release of July CPI

US stocks have started the day high, absorbing losses from yesterday as investors eagerly await the US inflation report for July to be released tomorrow. Investors are driving their capital into the stock market, hoping the US inflation rate will likely slow down from the CPI data to be released tomorrow.

Stock traders care so much about the inflation report to be released as it will determine the pace for future interest rate hikes by the Fed during their next session. A higher reading from the CPI report above the forecast of 0.2% will likely push the Fed to continue with the aggressive interest rate hike by over 75 basis points or more during their next session in September. In contrast, a reduction in the inflation rate from the CPI report will give investors the firm hopes to return fully to rebuying US stocks.

More active US stocks have made some positive moves during the Asian session today.

  • Apple (#AAPL) is up by 0.45% with its price at $164.88
  • Adobe Systems Incorporation (#ADBE) is up by 0.35%, with its price at $434.06
  • Best Buy Co (#BBY) is up by 0.65%, with its price at $78.50
  • Compass Inc (#COMP) is up by 2.5%, with its price at $4.56
  • eBay Inc (#EBAY) is up by 0.6%, with its price at $47.57

Generally, the high expectations for a reduction in the US inflation rate seem to push the stock market up again. The decline in oil prices in the past month up till the present moment has given investors more hope to believe that the US inflation report for July will probably fall massively. Oil prices have remained below $100 per barrel for the more significant part of July up until now. This is quite different from the situation witnessed in June when oil prices rose above $110, almost running through the month. This caused the inflation rate in June to attain a forty-year high of 9.1%. Well, some analysts believed that the inflation rate peaked at this point.

With the reduction in oil prices in July, investors are much more optimistic about a massive decline in the inflation report to be released tomorrow. This will further push more investors into stocks with the expectations of a slow down in the pace of the interest rate hike by the Fed during their next session in September.

How does inflation affect US stocks?

Some analysts argue that inflation often favours the stock market as investors tend to jump into them as a hedge against inflation. However, the case is quite different for the US stock market presently. The high rate of inflation seen in the US economy has instilled fears of possible recession among investors. This has led investors to be more reserved in their investments in stocks within the first and second quarters of 2022.

Rising inflation often pushed the Fed to hike the rate aggressively. This accounts for the Fed’s series of interest rate hikes for four consecutive months. Walking the interest rate affects the US stock market negatively. Investors tend to withdraw from the stock market and move into less risky assets.

Best stocks to trade today

Akamai Technologies Inc (#AKAM) Goldman Sachs Group Inc. (#GS)
Alibaba Group Holding Limited (#BABA) American Airlines Group (#AAL)
Blackberry Ltd (#BB) Adobe Systems Incorporation (#ADBE)
Baidu Inc (#BIDU) Toyota Motors Corporations ADR (#TM)
Best Buy Co (#BBY) Bank of America Corporation (#BAC)
Netflix Inc (#NFLX) JP Morgan Chase & Co. (#JPM)
Caterpillar Inc (#CAT) Zoom Video Communications Inc. (#ZM)
AMC Entertainment Holdings (#AMC) Google - Alphabet Inc. (#GOOGL)
Microsoft Corporation (#MSFT) Amazon Inc. (#AMZN)
Apple Inc.(#AAPL) NVIDIA Corporation (#NVDA)
Last Updated: 09/08/2022

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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