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One of the biggest debates and reasons for many of the market’s latest swings has been the presence of rising inflation. Thanks to wide-sweeping stimulus efforts, the re-opening of the economy and COVID-19-related shortages, traders have had to deal with the specter of inflation for what feels like forever. This week, however, traders received some confirmation that the pop of higher prices may, in fact, be transitory. Several Fed governors, as well as economic data, outlined that inflation could be flatlining. Traders saw this info as positive, setting a moderately bullish tone for the week.
As for the rest of the week’s data, it still painted a bullish picture. Measures of housing, manufacturing and key critical consumer confidence data all pointed to a slowly growing economy.
Elsewhere, while the official earnings season is pretty much over, several retailers reported this week and showed decent guidance figures. Merger Monday also lived up to its name with several major buyouts and corporate actions spurring the market higher at the start of the week and setting up a bullish tone.
Finally, new stimulus measures seem to be working their way through Congress as the Republican and Democrat representors have started to discuss infrastructure plans and President Biden’s massive program to improve roads, bridges and other pieces of the nation’s economic backbone.
All in all, stocks spent much of the week riding high on the good news.
Be sure to check out our previous Wrap here, when a tech selloff hurt the market.