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A cautious start as investors wait for CPI inflation data

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🎯Equity markets were broadly lower throughout the trading session, given the anticipation for a hotter inflation reading. Nvidia fell sharply after its meteoric rise as traders re-assessed valuation ahead of uncertainty over the Fed’s rate cut prospect. 

🎲Adding pressure to the session is Boeing, which fell more than 3%. The Justice Department appeared to have opened a criminal investigation against the company regarding the recent Boeing 737 Max jet that had a blowout on Alaska Airlines in early January. 

💰Cryptocurrency continued to be hot, with Bitcoin surpassing the $72,000 mark. Progress has been made on more crypto ETFs entering the market, prompting investors to allocate a percentage of their portfolio to the crypto world. 

🎢Next is the robust performance of Chinese counters. On the list is PDD Holdings, which rose as the stock was upgraded. This provides sympathy to other related Chinese counters on the expectation that consumer spending may return to some stabilisation after the Chinese government ended its “2 sessions” meeting over the weekend. 

🥁The after-hours brought more good news to the market. Oracle climbed higher as the software enterprise giant posted better-than-expected earnings. Adding to the result is strong guidance, especially for its cloud computing business. 

This helped to allay fears of a possible slowdown in corporate spending. Indeed, cloud computing revenue was up 14% to $3.3 billion. The CEO, Safra Catz, stated that there is continued demand in large contracts for its cloud infrastructure business and that demand is exceeding supply, which is similar to the Nvidia envious situation where its graphics card supply is unable to meet the current market too. 

It comes as Oracle pulled itself out of two-quarter weak results due to supply constraints in its cloud computing business and transition to Cerner, which has weighed on the company’s growth capability. 

📪What’s on the menu today? 🖨

Everyone is waiting for the release of CPI data. We are still expecting a hot inflation reading, which will not bode well for our positions and the stock market unless there is a surprise downside. Gasoline prices probably rose, but the fall in medical costs might have helped to cushion the overall figure. 

Nonetheless, inflation will likely stay steady, warranting a more cautious Fed in deciding when to cut rates, if any. 

It is 12 March 2024, 8.55 a.m. in Singapore and 8.55 p.m. in New York. Given that the options market is pricing in a possible 1% move in either direction, we would have to prepare for underperformance in our portfolio as we try to re-adjust our holdings after a challenging start to the year and prior holdings. 

Have a fruitful day in school and work!

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