Read the highlights of this week’s commentary from Helios:
- Investors are showing increased confidence in the economy’s ability to withstand the Federal Reserve’s efforts to control inflation. Data from EPFR Global showed a significant inflow into global stock funds and junk-bond ETFs, indicating that investors are moving back into riskier assets.
- The overall Consumer Price Index (CPI) in October was unchanged compared to September, slightly better than the slight increase economists had expected. The annual inflation rate was 3.2%, just 0.1% lower than predicted. A notable 5% drop in gasoline prices contributed to the stability of the October CPI. Analysts think gas prices might drop further in November, which could bring the overall inflation rate below 3% for the first time since early 2021.
- Since the start of November, economic indicators like employment, consumer sentiment, and retail sales have shown that the economy is slowing, but not as much as feared. S&P 500 earnings also exceeded expectations.
- Some experts are skeptical, warning that either inflation will pick up again, leading to more rate hikes and a tougher economic situation, or the economy will slow down more significantly.