- Stocks attempted a recovery early in the week from the previous week’s sell-off but it was short-lived.
- Data released Tuesday morning by the Office for National Statistics showed that the UK labour market is continuing to recover with the number of UK workers up 241,000 to 29.1 million in August. According to the ONS, all regions except London, Scotland and South East are now above pre-pandemic levels.
- Further data from the ONS on Wednesday showed that UK annual inflation rose to 3.2% in August, up from 2% in July and well above expectations. The 1.2% jump in CPI was the largest since records began in 1997.
- There was also a surprising fall in UK retail sales last month. Data on Friday showed that retail sales fell 0.9% month-on-month in August, with a 0.5% rise expected. This is the longest negative streak in at least 25 years, being the fourth month in a row of declines
- Much for investors to think about including important policy meetings from the US Fed and the Bank of England this coming week, the course of inflation and what impact that will have on US Fed taper timing, the regulatory crackdown in China and a potential slowdown in global economic recovery.
- Our Breadth indicator stayed neutral but our Momentum Indicator ticked lower again.
- CPI data in the US came in below estimates on Wednesday at 0.3% in August indicating that inflation pressure may be easing. Investors were weighing how this might play into the Federal Reserve’s next move. We may find out within a few days as the US central bank’s latest meeting is due this week.
- Investors have a lot to weigh along with inflation concerns including China’s latest retail sales data which showed growth at a much lower pace than expected in August fueling concerns of slowing global growth.
- Our Breadth Indicator stayed negative and our Momentum Indicator ticked down.
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