Disinflation Talk Grows, Rate Hike Bets Plummet: Top 5 ETFs Rallying On CPI Miss
Portfolio Pulse from Piero Cingari
The disinflationary trend continued in July, with the annual CPI inflation rate slightly increasing from 3% to 3.2%, lower than the expected 3.3%. This led to a fall in core inflation to 4.7% YoY, below the anticipated 4.8%. As a result, traders updated their expectations for future interest rates, with over 90% probability assigned to rates remaining on hold in September. This shift in rate expectations revitalized the markets and risk assets. Five ETFs rallied after the CPI data release: Invesco QQQ Trust, ARK Innovation ETF, Consumer Discretionary Select Sector SPDR Fund, iShares Biotechnology ETF, and iShares Expanded Tech-Software Sector ETF.
August 10, 2023 | 3:58 pm
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POSITIVE IMPACT
ARK Innovation ETF rose 1.1% following the CPI data release, benefiting from reduced expectations of interest rates.
The lower than expected inflation data led to a shift in future interest rate expectations, which is beneficial for stocks and ETFs like ARKK.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
iShares Biotechnology ETF recorded a 1.4% gain following the CPI data release.
The lower than expected inflation data led to a shift in future interest rate expectations, which is beneficial for stocks and ETFs like IBB.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
iShares Expanded Tech-Software Sector ETF rose by 1.6% following the CPI data release.
The lower than expected inflation data led to a shift in future interest rate expectations, which is beneficial for stocks and ETFs like IGV.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
Invesco QQQ Trust, which tracks the Nasdaq 100 Index, saw a 1.2% increase following the CPI data release.
The lower than expected inflation data led to a shift in future interest rate expectations, which is beneficial for stocks and ETFs like QQQ.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
Consumer Discretionary Select Sector SPDR Fund rallied by 1.3% following the CPI data release.
The lower than expected inflation data led to a shift in future interest rate expectations, which is beneficial for stocks and ETFs like XLY.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100