The Stock Market: Macro, Fundamentals and Technicals

Where are we heading to?

As promised in my last update, here is my take on the markets.

Let’s start with the Macro.

1. Inflation

A key driver for the market in 2022 has been the fear of “out of control” inflation, causing the FED to intervene through monetary contraction and raising rates, the worst environment for stocks.

The last CPI reading came at 7.7% YoY inflation, whereas everybody else was predicting anything between 7.9% and 8.2%.

I was hoping to finally see a 7,something % as we as humans over-proportionally give weight to the first number (7). So it feels like we are going down from 8% to 7%.

That’s the reason we keep seeing prices at retail at $9.99 instead of 10$… it just feels cheaper!

Finally, we can see signs of an inflation rollover (blue line below turning down):

This happened even if the price of Oil was not friendly during October, hovering between 85 and 90 USD: