September Surge on Horizon as Reinfation Fears Vanish: Stocks Set to Rally

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September Surge on Horizon as Reinfation Fears Vanish: Stocks Set to Rally

In a surprising turn of events, it seems that the August stock market selloff was just a blip on the radar. Despite a brief retreat of about 5% in the first three weeks of the month, stocks have come roaring back in the final week, bringing the S&P 500 within striking distance of a new high. Investors can now prepare themselves for a new stock market rally that is set to take place in September.

One of the key factors contributing to this upcoming surge is the latest inflation data released this morning. The July Personal Consumption Expenditures report revealed that while there was a slight increase in core inflation rates from 4.1% to 4.2% in July, this was solely due to base effects. In other words, the comparison with the inflation rates from a year ago resulted in an artificial bump, which does not reflect the real core inflation trend.

Looking at a more accurate six-month rolling basis, the core inflation rate actually dropped to 3.4% in July. On a three-month rolling basis, it fell even further to just 2.9%, which is very close to the Federal Reserve’s target of 2%. This data sets the stage for a massive September surge in the stock market.

The main drivers behind the August selloff were reinflation fears and spiking yields. However, today’s inflation data essentially eliminates these concerns. The current reinflation is solely attributed to base effects, and once those effects are wiped away, the core inflation trend remains one of lower inflation. Moreover, the impact of base effects will become less pronounced in the coming month, with the Cleveland Fed’s Nowcast model predicting a further drop in core inflation for August.

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Additionally, Treasury yields, which experienced a spike throughout August, have started to plummet in the past week. This sharp decline is a direct result of consistently soft economic and inflation data. Leading indicators indicate that this trend of falling yields is likely to continue.

Based on the short-term data and our analysis, it is reasonable to expect that as reinflation fears turn into disinflation hopes and spiking yields transform into falling yields, the August selloff will be swiftly followed by a September surge.

Investors need to be prepared for this surge, and there is a potentially lucrative investment opportunity on the horizon. One company stands at the forefront of the AI Revolution, with the backing of powerful companies and investors worldwide. With a technology that already boasts over 100 million regular users, this company is poised for success in the coming months.

To benefit from this remarkable opportunity on the cutting-edge of the AI Revolution, investors should stay informed and seize the moment.

Disclaimer: The author of this article, Luke Lango, does not hold any positions in the securities mentioned.

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Frequently Asked Questions (FAQs) Related to the Above News

What is the main reason for the upcoming surge in the stock market in September?

The main reason for the upcoming surge in the stock market in September is the latest inflation data, which reveals that the current reinflation is solely attributed to base effects and does not reflect a real core inflation trend.

What does the inflation data indicate on a six-month rolling basis?

The inflation data on a six-month rolling basis shows a drop in the core inflation rate to 3.4% in July, indicating a trend of lower inflation.

How do falling Treasury yields contribute to the September surge?

Falling Treasury yields are a result of consistently soft economic and inflation data, and they contribute to the September surge by eliminating concerns of spiking yields that were driving the August selloff.

Should investors prepare for a surge in the stock market in September?

Yes, investors should be prepared for a surge in the stock market in September based on the data and analysis indicating a shift from reinflation fears to disinflation hopes and falling yields.

Is there a specific investment opportunity mentioned in the article?

Yes, the article mentions a potentially lucrative investment opportunity in a company that is at the forefront of the AI Revolution and already has over 100 million regular users.

Does the author of the article hold any positions in the securities mentioned?

No, the author of the article, Luke Lango, does not hold any positions in the securities mentioned.

Please note that the FAQs provided on this page are based on the news article published. While we strive to provide accurate and up-to-date information, it is always recommended to consult relevant authorities or professionals before making any decisions or taking action based on the FAQs or the news article.

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