$Tesla (TSLA.US)$ Why is the market so fearful and expects s...
$Tesla (TSLA.US)$ Why is the market so nervous and expecting such high growth?
On one hand, oil prices rebounded in October; on the other hand, the highest proportion core item - housing, had an accelerating trend from June to September.
However, in reality, the market is somewhat overestimating the impact of high-weighted projects.
From the perspective of month-on-month, the energy prices in October were actually higher than those in September, and it rose again after falling since July, so the oil prices in October did indeed have a "weighting" effect on the increase in CPI.
However, although the price of food is higher than in September (on a month-on-month basis), the month-on-month growth rate is the lowest this year, which is a good sign. Since the proportion of food in the entire CPI is larger than that of energy, the part of CPI outside the core is expected to be "better than expected". Among the core items, the highest proportion of shelter has a month-on-month growth rate of 0.8% and a year-on-year growth rate of 6.9%, reaching the highest level in recent years and also the strongest factor supporting this quarter's CPI. What does a lower-than-expected CPI mean?
First of all, a larger-than-expected decrease in CPI partly reduces the Fed's firm belief in raising interest rates. The market also thinks so. Currently, according to CME's interest rate observation tools, the probability of a 50 basis point and 75 basis point rate hike in December before the CPI announcement is half and half, but it rises to over 80% after the announcement. $Apple (AAPL.US)$ $Occidental Petroleum (OXY.US)$
On one hand, oil prices rebounded in October; on the other hand, the highest proportion core item - housing, had an accelerating trend from June to September.
However, in reality, the market is somewhat overestimating the impact of high-weighted projects.
From the perspective of month-on-month, the energy prices in October were actually higher than those in September, and it rose again after falling since July, so the oil prices in October did indeed have a "weighting" effect on the increase in CPI.
However, although the price of food is higher than in September (on a month-on-month basis), the month-on-month growth rate is the lowest this year, which is a good sign. Since the proportion of food in the entire CPI is larger than that of energy, the part of CPI outside the core is expected to be "better than expected". Among the core items, the highest proportion of shelter has a month-on-month growth rate of 0.8% and a year-on-year growth rate of 6.9%, reaching the highest level in recent years and also the strongest factor supporting this quarter's CPI. What does a lower-than-expected CPI mean?
First of all, a larger-than-expected decrease in CPI partly reduces the Fed's firm belief in raising interest rates. The market also thinks so. Currently, according to CME's interest rate observation tools, the probability of a 50 basis point and 75 basis point rate hike in December before the CPI announcement is half and half, but it rises to over 80% after the announcement. $Apple (AAPL.US)$ $Occidental Petroleum (OXY.US)$
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