Last Friday’s US CPI print came in strong, but stocks still rallied higher in one of the single biggest turnaround in the S&P500 in over a year. It was most likely to be a sell-the-fact response as markets had been selling stocks, gold, and silver, and buying the USD into the event.
So, with this sell-the-fact response, does it make sense to look at venturing into major indices once again? Even if it proves to be a bear market rally is there a short pop to the upside that makes sense from a fundamental perspective? These are tricky markets, highly dependent on incoming US data, but there are some fantastic seasonal periods of strength around for stocks.
Deutsche Lufthansa, for example, tends to gain consistently around this time of the year. Over the last 10 years, the stock has gained every time between October 17 and December 30. The average return has been a very healthy 15% and the maximum drawdown has been under 10%.
Major Trade Risks: If there is a deep recession in Europe, or the Russia/Ukraine crisis worsens then stocks can fall generally. Also, any specific news impacting Deutsche Lufthansa can impact this outlook.
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