Shop price inflation dips to 1.4% as UK retailers seek budget rate relief
Annual UK shop price inflation slowed to 1.4% in September, while the BRC warned retailers need business rates support to keep prices down.
Falling oil could trigger a 5-10% stock rally, says strategist David Spika, as lower crude may ease inflation and bond yields.
Whether stock and crypto markets finish 2026 with notable gains may hinge on oil prices, the largest obstacle. On Friday, the US 10-year Treasury yield closed at 5.17%, its highest since 2007, after the Federal Reserve raised rates this month. Such levels typically weigh on equities and digital assets, as investors prefer Treasuries as a safer bet.
Yet David Spika of Turtle Creek maintains that the S&P 500 can still climb an additional 5% to 10% by year-end. His case starts with crude.
On Friday, WTI crude settled near $92, a sharp drop from above $100 earlier this month. Spika argues that if oil keeps declining, inflation pressure should ease accordingly.
This could push long-term borrowing costs lower, giving high-priced stocks more room to run.
Several factors explain the retreat.
Cheaper oil would come at an opportune moment for markets. On September 16, the Fed raised its benchmark rate by 25 basis points to 3.75%-4%, stating inflation remains elevated.
Spika expects the 10-year Treasury yield to fall toward 4.75%-4.78% if oil continues dropping. That would ease one of the biggest pressures on equity valuations.
“I think stocks have in the 5 or 10% upside before year end,” Spika said, while warning earnings growth should slow next year.
His preferred names include Microsoft, whose Azure revenue grew 43% in its latest quarter, and Berkshire Hathaway, which held about $365.5 billion in cash and short-term Treasurys at the end of June.
The catch is oil can reverse quickly. Hormuz flows remain below pre-war levels, peace efforts remain uncertain, and investors are weighing more rate-hike risk.
Spika’s bullish call therefore rests on a fragile assumption: oil stays low enough, for long enough, to convince the bond market that inflation is losing another source of pressure.
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Disclaimer: this article comes from third-party media and is provided for reference only. It does not constitute investment advice. Crypto and other financial products carry significant price volatility risk, so please make your own decisions carefully.
Annual UK shop price inflation slowed to 1.4% in September, while the BRC warned retailers need business rates support to keep prices down.
UBS says the flatter US yield curve reflects tighter Fed policy, not recession, pointing to resilient jobs and earnings.
The US 10-year Treasury yield rose above 5.2%, its highest since June 2007, driven by weak auction demand and expectations of tighter Fed policy.
Fed's Lisa Cook warns AI and oil will sustain inflation, further rate hikes depend on data. Bowman no comment.