Today, U.S. equity futures tilted higher as traders considered the most recent reading on American inflation and the speculating surrounding when the Federal Reserve would raise rates in a post-pandemic world.
All indications are that the Federal Reserve will hike rates at least three times this year, and the fourth raise in December is seen as a done deal. The latest economic numbers, which barely moved the market today, won’t deter them from continuing to tighten credit as they have signaled from day one.
A recent rise in bond yields has caused a market correction. Currently, investors are paying more attention to this jump and less to high-flying tech stocks.
The market is generally bearish – investors are short, hedges are overly large, everyone has on the puts, sentiment is negative, everyone is looking for the correction. This bearish atmosphere may redirect into buying prospects in the equity market.
The decrease in volatility help stabilize the markets and make it manageable to continue their rally. One other significant factor is the record amount of share repurchases this year.
As more investors believe that the dollar has reached its peak, the U.S. currency has started to plunge. Thus far, it has underperformed all of its G10 counterparts.