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Is The Rally on its Way to Record Highs?

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The United States experienced a slight deceleration in its annual inflation rate in November, in line with expectations. According to data released by the Bureau of Labour Statistics on Tuesday, the year-on-year growth in headline consumer prices declined to 3.1% last month, down from 3.2% in October. The month-on-month reading showed a marginal uptick of 0.1% against projections from economists 0.0%

The closely monitored «core» figure, which excludes volatile items such as food and energy, recorded an annual rise of 4.0%, unchanged from the previous month. On a monthly basis, underlying price gains accelerated marginally to 0.3%, compared to 0.2% in October.

Markets have been pricing that the central bank may initiate rate cuts as early as March next year, propelling the equity benchmark index to a new high of 4,632 for 2023. The strong rally from the October lows unfolded despite Federal Reserve Chair Jerome Powell emphasizing the Fed’ cautious approach, until a proof that still heightened inflation is under control. Despite the strongly overbought momentum readings, the index appears on track to challenge its previous record high of 4,818.

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Source: TradingView

In the final monetary policy meeting by the Federal Reserve for this year, which is scheduled to conclude on Wednesday, the Fed is expected to maintain interest rates on hold in the range of 5.25% to 5.50%. Tuesday’s inflation report does not support further interest rate hikes. Fed officials said number of times that inflation deceleration would be on a bumpy ride and Tuesday’s report is one of them. Still inflation is on the right path as it is decelerating, although slowly.

The labour market has been gradually softening and the Fed is likely to maintain its cautious, data-dependent policy approach heading into the new year when is considering starting to lower interest rates.

On Wednesday attention is likely to be concentrated on statements from Fed chair Jerome Powell, particularly regarding the central bank’s plans for potential rate cuts in 2024. The release of the Fed’s quarterly «dot plot» which outlines policymakers’ projections for future rates, will be closely scrutinized.

Investors are focused on when rate cuts will start and how fast they’ll go. Markets are currently assigning an almost 50% probability of a rate reduction in May next year, according to the CME FedWatch Tool. The chances of a rate cut in March have dropped to 47% from 57% a week earlier. Overall, Wall Street is already pricing in four rate cuts for 2024 expecting one full percentage point reduction.

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Violeta Todorova

Senior Research

Violeta se unió a Leverage Shares en septiembre de 2022. Ella gestiona la realización de análisis técnicos, investigación macroeconómica y de acciones, y ofrece información valiosa que ayuda a la definición de estrategias de inversión para los clientes.

Antes de unirse a LS, Violeta trabajó en varias empresas de inversión de alto perfil en Australia, como Tollhurst y Morgans Financial, donde pasó los últimos 12 años de su carrera.

Violeta es una técnica de mercado certificada de la Asociación Australiana de Analistas Técnicos y tiene un Diploma de Postgrado en Finanzas e Inversiones Aplicadas de Kaplan Professional (FINSIA), Australia, donde fue profesora durante varios años.

Julian Manoilov

Marketing Lead
Julián se unió a Leverage Shares en 2018 como parte de la principal expansión de la compañía en Europa del Este. Él es responsable de diseñar estrategias de marketing y promover el conocimiento de la marca.

Oktay Kavrak

Head of Communications and Strategy

Oktay se incorporó en Laverage Shares a fines de 2019. Él es responsable de impulsar el crecimiento del negocio al mantener relaciones clave y desarrollar la actividad de ventas en los mercados de habla inglesa.

Él vino de UniCredit, donde fue gerente de relaciones corporativas para empresas multinacionales. Su experiencia previa es en finanzas corporativas y administración de fondos en empresas como IBM Bulgaria y DeGiro / FundShare.

Oktay tiene una licenciatura en Finanzas y Contabilidad y un certificado de posgrado en formación empresarial de Babson College. También es titular de una certificado CFA (Chartered Financial Analyst).

Sandeep Rao

Investigación

Sandeep se unió a Leverage Shares en septiembre de 2020. Está a cargo de la investigación de líneas de productos existentes y nuevas, clases de activos y estrategias, con un enfoque particular en el análisis de eventos y desarrollos recientes.

Sandeep tiene una larga experiencia en los mercados financieros. Comenzó en un hedge fund con sede en Chicago como ingeniero financiero, su carrera abarcó varios dominios y organizaciones durante un período de 8 años, desde la División de Prime Services de Barclays Capital hasta (más recientemente) el Equipo Index Research de Nasdaq.

Sandeep tiene una maestría en Finanzas, así como un MBA del Illinois Institute of Technology de Chicago.

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