After struggling in September, the three major averages have put together a 5-week winning streak that could be driven by a handful of reasons. First, reported earnings have been solid. Second, there is no doubt that the delta variant caused the economy to slow and caused further global supply chain disruptions.
As we move past peak delta the economy is now seeing a pickup in growth which is evident in the economic data releases. Third, employment is finally starting to show some nice momentum with jobless claims continuing to fall coupled with a better-than-expected October jobs report. Lastly, the infrastructure bill was finally passed which is a tailwind for economic growth.
For the week ahead, we get a fair amount of inflation data. With the 10-year Treasury interest rate falling from 1.6% to under 1.50% in just a few days, let’s see how interest rates react to these inflation readings. The key question concerning inflation is do we hit peak inflation during this fourth quarter?
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