Market Recap: Week Ended August 12, 2022

Global equity markets pushed higher for the week ended August 12, 2022. Markets have been rallying thanks to data showing that inflation has started to slow. The S&P/TSX Composite Index advanced, pushed by the Energy and Materials sectors. In the U.S., the S&P 500 Index finished higher, benefitting from the Information Technology sector. Oil and gold prices both rose over the week. In fixed income, 10-year government bonds in Canada and the U.S. also moved higher.

Has Inflation Peaked?

-In the U.S., inflation for July ended up below estimates, giving hope that the rise in inflation might be nearing its peak.

-The U.S. inflation rate was 8.5% in July, below the expected 8.7% and the incredibly high 9.1% in June.

-Lower prices of fuel helped to ease inflation however, food and shelter costs still rose throughout July.

-This positive inflation news heightens expectations that we could see some moderations of future interest rate hikes.