While higher inflation should be an indicator of a booming stock market since the consumers are spending more and the companies make more profit, this time the case is different.
The simple macroeconomics behind it:
Higher Inflation=Higher Interest Rates, which=Higher Borrowing Costs for the S&P companies
And as you have already connected the dots higher borrowing costs mean less profit, so that is indeed what we are expecting to see in the stock market.
The Seasonality for January for the S&P tends to be neutral to slightly bullish which is another confluence that we can see some pain in the coming weeks.
This is our second trade on the S&P as the first one was with half of the risk and tight stop loss which was triggered, so now is the perfect opportunity for our second part of the trade.
REMEMBER- Patience is the key for being consistently profitable
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Comment your opinion below:)
The simple macroeconomics behind it:
Higher Inflation=Higher Interest Rates, which=Higher Borrowing Costs for the S&P companies
And as you have already connected the dots higher borrowing costs mean less profit, so that is indeed what we are expecting to see in the stock market.
The Seasonality for January for the S&P tends to be neutral to slightly bullish which is another confluence that we can see some pain in the coming weeks.
This is our second trade on the S&P as the first one was with half of the risk and tight stop loss which was triggered, so now is the perfect opportunity for our second part of the trade.
REMEMBER- Patience is the key for being consistently profitable
.
.
.
Comment your opinion below:)
Comment:
Trade active and slightly in profit
