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With inflation fears frequently gripping the markets, does the Dow Jones stand any chance of returning to its 35,000 all-time highs?

US: Can Dow Jones get back to 35,000?

Last Wednesday’s inflation data was the last thing US investors wanted to see. Already concerned with inflationary pressures due to rapidly rising commodity prices and some key data out of China, April’s CPI reading was make or break for the markets.

Instead of falling from 0.6% to 0.2% month-on-month, it rose to 0.8%, hitting an annual rate of 4.2% – more than double the Fed’s standard 2% target. To rub salt into the wound, the core reading rose from 0.3% to 0.9% month-on-month, striking an annual rate of 3.0% against the 2.3% forecast.

All this left the Dow Jones with an inflation migraine and its worst daily performance since January. And this just days after it had struck 35,000 for the first time.


The week’s economic calendar, then, is going to have to be pretty exemplary if the Dow is going to be won over.

A quiet Monday is then followed on Tuesday by the CB consumer confidence and new homes sales readings.

Thursday is then the biggie, where the second look at the Q1 GDP reading – which last came in at an annualised rate of 6.4% – is joined by the durable goods orders, pending home sales, and the usual weekly jobless claims numbers.

Friday, finally, sees the Fed-favourite core PCE price index inflation-measure, alongside the goods trade balance, personal spending, personal income, Chicago PMI and consumer sentiment numbers.

UK: A quiet week on the data front

The UK is facing an achingly quiet week on the data-front, one that is likely going to leave the FTSE and pound on a US leash when it comes to their respective trading performances.

The public sector net borrowing number is out on Tuesday, followed on Thursday by the Nationwide HPI reading.

Eurozone

Things are slightly more interesting in the Eurozone than they are in the UK, though not by much.

Tuesday’s German Ifo business climate reading is following on Thursday by the French preliminary Q1 GDP figure, and on Friday by German retail sales and Spanish and Italian inflation.

This article is brought to you in association with Spreadex. All opinions expressed in this article are from the author and do not necessarily represent the opinions of The Armchair Trader. You can find out more about Spreadex products and services here, or find more articles from Connor Campbell here.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Connor Campbell

Connor Campbell

Connor joined Spreadex in 2014 as part of a newly expanded financial analyst team after graduating from the University of Southampton with an MA in English. His focus is on providing Spreadex's customers with up-to-date and informative news, and is responsible for the market analysis found on the Spreadex website.

Connor produces three daily market updates, a daily stock earnings preview, a weekly financial market preview piece every Friday, a round-up of all the big financial stories making the weekend press every Monday morning and regular stock market features.

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