The latest CPI data proved to be yet another roller-coaster day. Major indices switched between gain and loss and finished off lower as worry about a looming outweighed the better inflation result.
There is some traction that May FOMC may see the Fed continuing its rate hike cycle. While the headline inflation had dropped, the core price index remains firm due to falling energy prices, driven by the gains seen in shelter and services.
A mixed inflation bag of reading
Fed officials are likely to be heartened by the drop in headline inflation rate. However, they will have to grapple with the uncertainty of high core prices.
Reading this with the March job report proves to be a clearer picture that the Fed could still have some headroom for a rate hike given the healthy labour market condition.
Thus, most economists still expect a 25 basis point rate hike during the next meeting on May 3.
Shelter inflation is a headache, but signs of progress seen
As we examine the March data, we can see some positive trends. The rents’ monthly growth had dropped to 0.3%. Also, the rent in the private sector often reflects a more realistic real-time measure of the current situation, signals that shelter costs are indeed downward. However, they are not surfacing in the government data as of now.
What’s on the menu today?
At 8.30 pm, we will have the PPI data. We are expecting a growth of 0.1%, reversing from the previous decline of 0.1%.
Initial Jobless Claims will also be released concurrently. A modest uptick from 228K to 232K is expected.
It is 13 April, Thursday 8.50 am in Singapore and 8.50 pm in New York. It has been a challenging trading night, and we are holding on to some positions in considerable unrealised loss on major indices after the market faded fast in the late trading hours. We could not exit in time, and this is yet another costly lesson.
On the flip side, gold prices are holding steady, and so are value stocks such as those seen in Coca-Cola and McDonald which tend to fare well in the current environment if you would like to explore them.
We hope you have a profitable trading day ahead!
Follow us on our Socials!
- Telegram: https://t.me/invest_with_pika_world
- Instagram: @themoneynmeaning
More Stories
Markets in risk-on mode with year end rally on track.
Consumer Discretionary Stocks Lead Losses, Hinting at Recessionary Concerns
All is well.