The big surprise at the start of this week was the leap in oil prices after OPEC+ announced a cut in oil production. At one point today oil was up more than 8% from Friday. There was a similar gain over the previous week and not surprisingly the best performing sector last week was Energy. James Bullard, President of Fed Bank of St. Louis said that an increase in the price of oil might make the job of lowering inflation more challenging. Clearly the odds of another Fed rate hike at the next meeting just increased.
Stocks were higher last week and have held those gains today (Monday) as fears over the stability of the global financial system subsided.
After printing above 30 mid-March, the VIX, often called the stock-market’s Fear Gauge, fell back last week and finished at 18.7 on Friday – a level considered by many to represent complacency.
There was some good news on the inflation front last week when the US core PCE (the Fed’s preferred measure of inflation) came in a little lower than expected at 4.6% (4.7% forecasted) – investors hope this is an indication that inflation has peaked even though it’s still a way off the 2% target.
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