Stocks Retreat As Inflation Exceeds Analyst Expectations

U.S. has just released inflation reports for October. The reports indicated that Inflation Rate increased by 0.9% month-over-month in October while analysts expected that Inflation Rate would grow by just 0.6%.

On a year-over-year basis, Inflation Rate increased by 6.2% compared to analyst consenus of 5.8%. Core Inflation Rate grew by 4.6% year-over-year compared to analyst consensus of 4.3%.

S&P 500 futures gained additional downside momentum after the release of inflation reports as they indicated that inflation was not under control. Prices are growing faster than expected, and the Fed may be forced to raise interest rates sooner than previously expected, which will be bearish for stocks.

Initial Jobless Claims Decline to 267,000
U.S. has also released Initial Jobless Claims and Continuing Jobless Claims reports. Initial Jobless Claims report indicated that 267,000 Americans filed for unemployment benefits in a week compared to analyst consensus of 265,000. Continuing Jobless Claims grew from 2.1 million to 2.16 million.

The job market reports indicated that the situation in the job market remained stable, which may be a bit bearish for stocks as it provides Fed with an opportunity to cut support to markets.

Gold Gets Above $1830 After Inflation Reports
Gold gained upside momentum and managed to get above the key resistance level at $1830 after the release of inflation reports which showed that inflation was rising faster than expected. Meanwhile, U.S. dollar moved closer to yearly highs against a broad basket of currencies. However, stronger dollar failed to put any pressure on gold.

Gold is traditionally viewed as an instrument that can protect investors from inflation, and it looks that traders are ready to bet that gold will be able to gain additional upside momentum. Currently, gold is trying to settle above the next resistance level at $1845, so gold mining stocks will likely enjoy strong support at the beginning of today’s trading session.

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