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Major Share Market Index Review!!
Markets have been spooked after US CPI data showed inflation is not coming down like many not only expected, but bet on considering the sharp one day selloff!!
There has been a good risk off tone to the action the previous few sessions and I expect that this could continue until the US Fed Reserve takes the bull by the horns and raises interest rates more aggressively. The question is now how high do they need to go???
So what does this mean to global share markets? Well if the US sneezes…everyone else catches a cold!! Higher interest rates mean a higher cost of debt financing. Considering that many companies growth and excessive share price appreciation has been thanks to cheap debt; future growth may be hard to come achieve.
So far Central Banks have been wrong with the transient nature of inflation…so will they be wrong again and fail to tame the inflation bull?
We can see that major Indexes are reflecting the uncertainty and trending lower with Bond Yields and USD again moving up. Major Indexes are moving in a relatively orderly fashion but the fear may start to grow if support continues to fail.
For me…it is NOT a time to enter new share positions until unknown becomes known!!
Check out the charts below and see what YOU think.
Happy Trading!!
Braden
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