1. Inflationary pressures may be decreasing, awaiting December data for confirmation. 2. Unexpected drops in services components, like shelter rents, are unusual but possible.
FAQ
Why Bullish?
A genuine decrease in inflation could lead to favorable monetary policy, boosting S&P 500. Historically, lower inflation has correlated with increased stock prices as it alleviates pressure on interest rates.
How important is it?
Investors closely monitor inflation statistics as they significantly influence monetary policy and market performance. The potential for declining inflation circumstances can mobilize investor confidence in equities.
Why Short Term?
Immediate investor sentiment could be positively influenced by pending inflation data; similar past situations reveal quick market reactions to CPI changes.