US markets ended sharply higher on Thursday last week, as a softer than expected October inflation report raised expectations for a less aggressive rate hike by the US Fed. Homebuilding companies soared 11% to 13%. Technology companies, Salesforce, Apple, Microsoft and Intel surged 10.0%, 8.9%, 8.2% and 8.1%, respectively. Media and entertainment companies gained over 9%. The S&P 500 index rose 5.5% to settle at 3,956.37, while the DJIA index advanced 3.7% to close at 33,715.37. The NASDAQ index climbed 7.4% to end the trading session at 11,114.15.
After a year of dramatic volatility, especially to the downside, investors are desperate for a recovery. If inflation in the USA can turn around, we might see the Fed pivot on their interest rate policy and even if they just lower the extent of future increases, investors will see it as positive. The best we can hope for is that we see a year-end rally, something like we saw in 1962 (see graph).
On the crypto side things are not looking good. One of the major cryptocurrency exchanges, FTX, is heading for liquidation and there might even be irregular activities involving investor funds. One thing we can say is that crypto is living up to its reputation as being a wild ride
