How profits hold up will determine what kind of a year stock market investors enjoy in 2022.
That will be enough to keep the bull market bubbling but only if valuations are not undermined by worries about inflation and rising interest rates.
Fourth quarter GDP growth has just emerged at 4%, well down on the 6.5% growth in the equivalent period in 2020 and off the pace of the 8.1% at which the Chinese economy grew for 2021 as a whole as it rebounded from the collapse in activity in early 2020.
The 7% Consumer Price Index reading was in line with expectations and may well be close to peaking but it still represents the worst inflation reading since the Federal Reserve was battling to overcome the damaging price spirals of the 1970s.
The price of energy is a key component of the inflation rate everywhere so investor focus will be on the monthly oil market report from OPEC, the oil producers’ group that still exerts a big influence on the price of black gold.
Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only.
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