Ignore Memes and Crypto – This is What to Look Out for This Week

Justin Freeman

Man Looking On Phone at Stock Market Graph

It’s hard to ignore the AMC-Bitcoin floorshow. Each time the crowd appears to begin to lose interest, a new and exciting development gives the markets a spectacular new lease of life. Elon Musk’s heartbreak emoji Tweet on Friday took 3.4% off the value of BTC. At the same time, meme stock prices whipsawed as AMC announced that it would be releasing 11.5 million new shares into the market. The decision to take advantage of investor demand to clear down debts makes sense but at the same time illustrates how easy it is to derail Reddit-based buying activity.

Some will continue to profit from trading the hotter markets. The group of the ‘the next meme stocks’ will also attract investors looking to anticipate the mood in the market. However, back in more traditional investment circles, there is enough excitement for traders. Thursday will see one of the biggest data releases of the year as the US announces its Consumer Price Index (CPI) numbers for May. The Wild West feel to current markets should be overshadowing price data reports, especially as CPI numbers have almost been dismissed for several years. However, this time it really is different, and possibly not in a good way.

Inflation Concerns Rise

Inflation is seen as the major risk to the equity bull market. April’s CPI data suggested that the US economy is overheating and soothing words from the US Federal Reserve that the price creep is transitory might not be enough to reassure the markets. Price inflation has historically been inversely correlated to equity prices, and there are a lot of big investors sitting on gains who will have an eye on scaling back on positions and locking in some profits.

US Core Inflation Rate

US Core Price Rise

Source: Trading Economics

Thursday’s announcement also comes during a lull in ‘other news’. Earnings season is done and dusted and the US Fed doesn’t give its next update on monetary policy until 15th June. That’s just under two weeks for inflationary fears to potentially creep into equity prices. Adding to the feeling that the CPI number is being dropped into something of a vacuum is the fact that there aren’t any further updates on US jobs data until the first week of July.

May’s US CPI Report – the Numbers to Watch Out For

  • Year-on-year inflation is forecast to be 4.7%, which is a gain from the 4.2% year-on-year number for April.
  • Analysts predict that core inflation will be up 0.4% for the month and 3.4% year-on-year.

Any significant beat of these numbers would represent a serious headache for the US Fed. Friday’s Nonfarm payroll numbers showed job creation not being as strong as forecast, but inflation near 5% could see the Fed accept that it needs to reverse its policy.

S&P 500 Nearing Record Highs

S&P500 Chart Showing Record Highs

Source: eToro

Friday’s close of US markets saw major indices close near all-time highs. Record highs, meme stock frenzies, and a crypto rebound all point to a bubble forming. The question is whether the CPI data will be the pin to prick it.

If you want to know more about this topic or have been scammed by a fraudulent broker, please contact us at [email protected]

Are you ready to trade?

Sign up with Forex Broker eToro Logo67% of CFD traders lose
Justin Freeman

Latest news

Kardashian’s $1m Fine Is A Warning To All Influencers
Kim Kardashian agrees to pay a $1. Read more
The Loophole Desperate Investors Are Using To Scramble Out Of FTX
NFT loophole allows FTX investors to reclaim their funds Desperate measures appear to be the only option for beleaguered FTX investors Claims of a $1. Read more

Safest Forex Brokers 2022

Broker Info Best In Customer Satisfaction Score
#1 AvaTrade LogoYour capital is at risk Founded: 2006 Globally regulated broker
Number One Broker
#2 BlackBull Markets LogoYour capital is at risk Founded: 2014 Global Forex Broker
Number One Broker
BEST SPREADS Visit broker
#3 75 % of retail CFD accounts lose money Founded: 2014 Global Forex & CFD Broker
Number One Broker
Best Trading Conditions Visit broker
#4 Forex Broker eToro Logo67% of CFD traders lose Founded: 2007 Global CFD & FX Broker
Number One Broker
#5 Plus500 Logo77 % of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Founded: 2008 Global CFD Broker
Number One Broker
Best Trading App Visit broker

    Forex Fraud Certified Brokers

    BlackBull Markets Logo
    IC Markets Logo
    AvaTrade logo
    Forex.com Logo
    XM Logo
    City Index Logo
    Exness Small Logo
    IQ Option Logo
    skilling logo
    HYCM Logo
    LegacyFX Small Logo
    ATFX Logo
    OctaFX Logo
    Plus500 Small Logo