© Reuters
Investing.com – European indices are nervous this Tuesday as IBEX 35, CAC 40 and others wait to find out in the US for November and how it could affect Wednesday.
The data should reveal a further slowdown in the rate of price increases as experts expect the CPI to rise 7.3% year-on-year, down from 7.7% previously. As for the core CPI, it is estimated to have increased by 6.1% “against 6.3% previously”.
They stressed in Renta 4 that: “Recall that the latest inflation signals have been mixed, as producer prices exceeded expectations, but consumer inflation expectations improve on expectations.”
For their part to LINK Securities they explained that “In principle, the slowdown in inflation will be largely the result of lower growth in energy prices, while food prices are expected to continue to rise strongly. Also many commodity prices expected to fall Utilities inflation will continue to prove difficult to suppress Some “better” than expected numbers will also give “wings” to the rally in both fixed income and Western equities in recent months, as investors take it for granted, if they haven’t already, that inflation has peaked in the United States.”
These analysts added that “this, and always following this line of argument, will allow the Federal Reserve to terminate the process of raising interest rates earlier and at an interest rate lower than expected. Conversely, as happened on Friday with the Producer Price Index (PPI) for the same month, the readings were worse.” To some extent than expected, the selling will return to this market, trailing the rest of the western stock markets.,.
According to FX Street, big investment banks are already evaluating their groups and how the data could affect major North American indexes. JPMorgan (NYSE:JPM) is bullish in the S&P 500 as it expects the benchmark stock index to rise 2-3% if year-over-year CPI matches market expectations between 7.2% and 7.4% . The US bank expects a recovery of between 8.0% and 10.0% should the inflation number reach 6.9% or lower.
Goldman Sachs (NYSE: ) is a bit cautious in its outlook, expecting gains of more than 3% if the US CPI falls below 7%.
They estimated in the bank that “a 7% to 7.3% reading would see a 2% to 3% addition to the S&P 500,” adding that a 7.4% to 7.7% US CPI could send the S&P 500 lower from 1 %. at 2%. The US bank also notes that inflation readings above 7.7% could lead to losses in the S&P 500 of more than 3%.
