Inflation is there to stay, is that what is PPI telling us?

SP500 in two weeks low. 

Market analyst – IFC Markets

Earlier this week I had an article here about inflation and its importance in the current market situation. For a quick review, just need to mention that despite missing NFP numbers, it still, unemployment fall to 5.2% as oy was expecting, and it tells us that the labor market improving fine, and now eyes are on inflation numbers as the second priority, which is now shifting to be the first priority. 

Friday’s published data showed that producer inflation rose in August with the highest speed in the last 11 years. This increasing risk in the stock market is one of the reasons for the pressure and difficulties of the supply chain. 

Charlie Ripley, senior investment strategist for Allianz (DE: ALVG) Investment Management about Friday’s PPI numbers said: “Today’s data on wholesale prices should be eye-opening for the Federal Reserve, as inflation pressures still don’t appear to be easing and will likely continue to be felt by the consumer in the coming months,” 

With current numbers and data, now we can count more on tapering to start in 2021. 

From the technical point of view, in the daily chart, as we can see, despite the ease in the past 4 days, still we are in a clear uptrend. As we can see any time that price fell up to 50 DMA, it again started to rebound. So as long as this pattern is not violated, we can still count on the uptrend. 4,420 is the key support and as long as asset trading is above this level, the uptrend is confirmed. 

S&P 500 analysis


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