Inflation will gain most of the attention this week, with data reports expected on consumer and producer level inflation. With the labor market on the mend, inflation will continue to be on investors’ minds as both labor and inflation are key factors that influence the Federal Reserve’s decisions on policy. The consumer price index and the producer price index will be released on Wednesday and Thursday, respectively.
With U.S. markets focused on the economic recovery and rising inflation, global markets were rocked by China’s social crackdown now reaching its capital markets. Several of China’s regulatory agencies cracked down on overseas IPOs, resulting in China’s stock market falling more than 10% early in the week.
As the economy continues to gain steam, the transitory inflation debate continues to be the juggernaut for the markets, creating disproportionate gains for growth stocks not seen since Q3 2020. The S&P 500 Index produced a return of 8.6%, while the S&P 500 Growth index returned 11.9% over the S&P 500 Value index return of 5%.