The recent Consumer Price Index (CPI) numbers and the Dow performance have been encouraging, with Bitcoin finally heading in the right direction. But is this a sign of an impending market turnaround or are we heading for more pain? In this article, we’ll take a look at what the biggest companies and institutions are doing that could give us some insight into where things are going.
CPI and Dow
The market sold off slightly but was in line with expectations. December’s CPI reading came back at -0.1%, which is lower than it has been in 50 years – only 4% of readings since 1950 have been lower than -0.1%. While this could be an ominous signal, it does show that the economy is not as weak as some had feared.
The Fed’s Response
As more indicators suggest that the economy is weakening rather than strengthening, the Federal Reserve has raised interest rates to their highest level in 15 years. This may help to stem any further damage but could also put pressure on businesses if it continues for too long.
December Jobs Report
The December jobs report showed a payroll increase of 223,000 and an unemployment rate of 3.5%. This shows that despite increasing interest rates, the labor market remains strong at the end of 2019 – something investors should pay close attention to over coming months.
It’s important to consider all indicators before jumping to any conclusions about where the market is headed next; while inflation has gone down and rates have risen significantly, businesses haven’t been overly affected yet and unemployment remains low. With so many variables in play, only time will tell what effect these changes will ultimately have on markets around the world