Inflation Data Shakes Up the Market
Channel: The Fastest Four Minutes in Finance
Date: 2024-02-19

3 takeaways from the market recently👇 

1️⃣ Investors REALLY overreacted to inflation data. Stocks plummeted after January inflation numbers were higher than economists expected. The Consumer Price Index was up .3% from the previous month, and 3.1% year-over-year. This was higher than a prediction of .2% and 2.9%. But, a larger driver of the number was shelter prices, which surged 6% over the past year, and .6% over the past month. Markets plummeted when the data was released because the knee-jerk reaction was that this could delay the Fed’s decision to cut interest rates. But, after digesting the data, markets began to recover 24 hours later. 

2️⃣ Bonds are attractive to investors again in a big way. More than $20 billion flowed into intermediate core and intermediate core-plus bonds in January. This was the most of any fund category, according to Morningstar. Fixed Income total returns could look very attractive if interest rates are cut. 

3️⃣ Flows into Technology are still strong, but not the leader. The Magnificent Seven led the market performance in 2023, but their leadership may be waning. A diversified portfolio could let you participate in market leadership wherever that is found in 2024. 

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