Market Commentary: Week to 16 August 2022
Market News
Stock markets managed another week of gains, extending the rally in American indices to two months. This has encouraged a hint of euphoria to develop, which has been reflected in the rise of cryptocurrencies, meme stocks and, of course, the technology sector favourites. Judged by the strength and breadth of the rally, and the fact that a lot of bad news has been absorbed on the way up, some analysts are calling this the end of the bear market. Their optimism was somewhat confirmed last week when investors witnessed a rare decline in US inflation data for the month of July. This was seized on as evidence that inflation has now peaked, enabling the rally in asset prices to continue. In another positive development, a survey of US consumer confidence showed a surprisingly strong uptick and bounced off its readings of the previous few months, which had been the lowest in the survey’s 70-year history. Bad news was shrugged off, such as the startlingly poor business activity surveys for the Mid-West and East Coast, as US stocks produced an especially strong week. The S&P 500 index has now recouped more than half its declines since the year began.
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