The stock market’s new ‘wall of worry’ is built on inflation and rate fears

The U.S. stock market on Friday posted one of its best weekly performances in years, recapturing half of the losses from the startling market correction earlier this month and discovering a new “wall of worry” to climb.

New York Federal Reserve Bank President William Dudley is slated to speak on Thursday, while Cleveland Federal Reserve Bank President Loretta Mester and San Francisco Federal Reserve Bank President John Williams have speaking engagements on Friday.

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New York Times -
Inflation and Stocks Are Both Up, and That’s Stirring Some Worries

Two weeks ago, fears of higher-than-expected inflation and interest rates sent stocks into a historic and nerve-rattling plunge.

In the wake of this month’s correction, and the ensuing recovery in stock prices, some market experts are saying that stocks can continue to rally even if interest rates and inflation rise, as they did Wednesday. The bulls are backed by data showing that, during the six periods of rising 10-year Treasury rates since 1988, the S.&P.

Wall Street Jurnal -
Global Stocks Extend Rebound

Stocks, though, have been on the rebound since then, with investors focusing on the solid fundamental picture, driven by a rare spurt of synchronized global growth and strong corporate earnings.

Futures pointed to an opening gain of 0.5% for the S&P 500 after the index on Wednesday registered its largest four-day percentage gain since July 2016. Data on Wednesday offered fresh signs of a pickup in inflation, with U.S. consumer prices rising more than expected last month.

DW -
US inflation data spells more trouble for stock markets

Send Facebook Twitter Google+ Whatsapp Tumblr linkedin stumble Digg reddit Newsvine. The fairly strong inflation report is likely to put more pressure on financial markets in the US and beyond.

US consumer prices rose by more than projected in January as apparel costs jumped the most in nearly three decades, adding to signs of an inflation pickup that have roiled financial markets this month. The US Consumer Price Index (CPI), which tracks the costs of household goods and services, rose 0.5 percent last month, with a measure of underlying inflation, excluding volatile food and fuel prices, posting its biggest gain in a year.

New York Times -
Wall Street Drops as Inflation Tops Expectations

Stocks were lower on Wall Street Wednesday after new figures showed inflation rose faster than expected, raising the specter of a more intense pace of interest rate increases than investors had anticipated.

Japan’s benchmark index, the Nikkei 225, was down less than 0.5 percent at the close, while markets in London, Frankfurt and Paris were up slightly in afternoon trading in Europe.

Washington Post -
Wall Street might not like this: Inflation rises 2.1 percent, faster than expected

The Consumer Price Index, which measures how quickly prices are going up in the U.S. economy, rose at a faster than anticipated 2.1 percent in January compared to a year ago, triggering fears of another rocky run on Wall Street.

The monthly Labor Department report on the price of everything from gas to groceries was closely watched Wednesday, with Wall Street investors suddenly very concerned about inflation.

“Four hostile newspapers are more to be feared than a thousand bayonets...” ― Napoléon Bonaparte