Cooling inflation gives stocks a helping hand

Chris Beauchamp IG

Slowing annual UK inflation and a fall in US core CPI have given stocks the space to rally this afternoon, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.

Stocks surge as good news arrives in spades

After a shaky start to the year stocks seem to have found their footing, helped in a big way by today’s US inflation and earnings data. Yesterday’s PPI data in the US raised the prospect that today’s figures wouldn’t come in too hot, and while the headline figures were slightly higher, the key core figures delivered the good news. Investors can live with a cautious Fed so long as inflation remains contained. Today’s news seems to support that thesis, and has seen risk appetite switch firmly back to bullish.

UK mid-caps continue to recoup losses

Today’s UK inflation data was also good news for hard-pressed FTSE stocks, and there was plenty of interest in the FTSE 250 and its UK-focused names. After the unrelenting parade of bad news on the UK economy, today’s figures are a welcome change. The problems remain however, but for now the bond vigilantes, and their equity market cousins, have gone quiet.

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Chris Beauchamp

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