This Valentine, Stocks got love from the markets with major global indices like SPX500, DAX30, CAC40 and Hong Kong 50 closing in the green. This was, in spite of strong inflation data as well as a horrible retail sales report that threatened to disrupt the bullish momentum.
Head line inflation in the US hit 2.1% in January against expectations of 1.9% and what was noteworthy was that almost every category saw a price rise. This has strengthened expectations of three to four rate hikes from US Fed and markets have already priced in a 20% chance of four hikes, which is up from 10% in the beginning of the year. On the other hand, US retail sales declined by 0.3% against a forecast of 0.2% rise MoM. Markets got spooked in the beginning but recovered sharply to close in the green.
After all, its Valentines Day.