Stocks just spiked the most in two years on cooler inflation data

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United States consumer price index showed inflation has slowed, sending stocks soaring. Read on

The Toronto Stock Exchange’s S&P/TSX composite index was up 469.05 points, or 2.42 per cent, at 19,813.3.

Treasuries rallied with the two-year rate, the most sensitive to monetary policy, plunging 24 basis points. The dollar slid. Investors may treat the 7.7 per cent headline figure as the latest evidence of peaking consumer-price growth, with potential to usher in an end to interest-rate hikes. The report also showed the consumer-price index coming in softer than expected on a month-on-month basis as well as in its core reading.Article content

“The first downside surprise in inflation in several months will inevitably be received by an equity market ovation,” Seema Shah, chief global strategist at Principal Asset Management, wrote. A 0.5 per cent hike, rather than 0.75 per cent, in December is clearly on the cards but, until we have had a run of these types of CPI reports, a pause is still some way out.”

Philadelphia Fed President Patrick Harker said he expects the central bank to slow the pace of interest-rate hikes in upcoming months as US monetary policy approaches restrictive levels. But, he noted Thursday in the text of his remarks to the Risk Management Association’s Philadelphia chapter, a “ hike of 50 basis points would still be significant.”

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Stocks just spiked the most in two years on cooler inflation dataUnited States consumer price index showed inflation has slowed, sending stocks soaring. Read on
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