Inflation Data Looms Over Markets

Consumer Price Index Data Looms

Over Markets

It‘s inflation day! If you’re someone who has been

following the markets this year, the monthly

US Consumer Price Index data has become

the “main event” of the month, and today is no

different. The Consumer Price Index, or CPI, is

the primary tool for inflation in a country. 

The

index is expected to have fallen to %8.1 on the

year from %8.5 in the month prior, which would

suggest inflation has “peaked”. The Federal

Reserve has already raised interest rates by 50

basis points in a meeting last week, and there

is speculation of a massive 75 basis point hike

if todays inflation data shows another -40

year high. Arguably the biggest loser from the

persistent, surging inflation is the NASDAQ100,

so lets look at the potential impact on this

popular index.

 If CPI is less than expected

If inflation readings come in cooler and show

that potentially the worst is behind us, then this

could be the catalyst stocks need to trade higher.

If CPI is higher than expected

If inflation readings come in hotter and show

yet another -40year high, then this could spell

more trouble for stocks.

This is the bear case for the NASDAQ100. Price

action in this scenario could be a retest of the

-200day moving average, before smashing

through March 2021s lows and making a

broader move towards to daily imbalance area.