@theMarket: Sticky Inflation Propels Yields Higher, Stocks LowerBy Bill Schmick,
03:11PM / Friday, April 12, 2024 | |
"One's a dot, two's a line, three's a trend," is how the saying goes. When applied to the inflation data this week, it spelled bad news for the financial markets.
Over the last two months, inflation showed increases in both the Consumer Price Index (CPI) as well as the Producer Price Index (PPI). This week, the March CPI data came in warmer than investors had hoped (0.4 percent versus expectations of 0.3 percent). The PPI was slightly below forecasts, but the monthly core index matched expectations. Not good.
Economists might say the jury is still out on calling a backup in the inflation rate, but traders shoot first and ask questions 0 Comments
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@theMarket: Stocks Consolidating Near Highs Into End of First Quarter By Bill Schmick,
02:29PM / Friday, March 29, 2024 | |
An important government inflation metric, the Personal Consumption Expenditures Price Index (PCE), for February came in as expected on Good Friday. Since the markets were closed, as investors celebrate the three-day Easter holiday weekend, Monday, April 1, should be interesting.
Core PCE rose by 0.3 percent from the previous month. Year-over-year PCE prices rose by 2.8 percent, easing slightly from the 2.9 percent increase in January. The PCE is the Federal Reserve Bank's favorite inflation indicator. As such, it carries a lot more weight when determining whether the central bank will stand pat or decide to cut interest rates in the months ahead. The February numbers 0 Comments
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@theMarket: Sticky Inflation Slows Market AdvanceBy Bill Schmick,
05:21PM / Friday, March 15, 2024 | |
February inflation data showed no progress on inflation. That follows the same kind of readings from the previous month. While two months does not make a trend, the disappointing numbers gave investors pause.
Both the Consumer Price Index (CPI) and its cousin, The Producer Price Index (PPI), came in warmer than economists had expected. Consumer prices rose 3.2 percent in February from a year earlier but were only slightly higher than economists' expectations of 3.1 percent. The PPI rose 1.6 percent year-over-year, which was the largest gain since last September. Month-over-month, the PPI at +0.6 percent was double the average forecast.
These data points 0 Comments
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@theMarket: Markets March to New Highs (Again)By Bill Schmick,
02:15PM / Friday, March 08, 2024 | |
At this point, a day without a new high seems almost abnormal. AI stocks rage higher, joined by weight loss companies like Lilly. The good news keeps rolling in with even Chairman Jerome Powell of the Federal Reserve Bank seemingly more dovish.
The Fed chairman testified before both the House and Senate this week. He indicated that we could expect a couple of interest rate cuts this year if the inflation data continues to weaken. He also said that if it does, the Fed won't wait until inflation hits its 2 percent target before loosening monetary policy.
The economy continues to grow, and while there is some evidence that labor growth is moderating 0 Comments
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@theMarket: Tech Takes Break as Other Sectors Play Catch-upBy Bill Schmick,
04:46PM / Friday, March 01, 2024 | |
One of the main complaints of market watchers has been the narrow breadth of the stock market. Few areas, besides the handful of tech stocks, have participated in the bull market this year. That has changed.
Biotech, crypto, financials, industrials, and even the staid healthcare sector have come to life this week. The Russell 2000 small-cap index outperformed as well. In the meantime, the Mag 7 and AI 5 marked time.
As I warned readers last week, I thought stocks were due for a little consolidation as traders took profits on some of the large gains accrued over the last two months. The fact that large-cap tech sold off and the markets barely budged was 0 Comments
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