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CPI +0.6%: Higher, but Not Scary; JNJ Vax on Hold?

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Tuesday, April 13, 2021

Market indexes are mixed ahead of today’s regular trading session, but improving following the last inflation read via the March Consumer Price Index (CPI), which came in hotter than expected, but cooler than last week’s Producer Price Index (PPI) which doubled expectations. Headline CPI last month reached +0.6%, 10 basis points ahead of consensus, and the highest single-month tally since June of 2009. Year over year, headline CPI is +2.6% — a more modest inflation metric.

Subtracting volatile food and energy costs — the “core” read — brings us to +0.3%, again a tenth of a point higher than expected, and a pronounced — if manageable — gain from the previous month. Year over year core is +1.6%, the highest in the past one year exactly. But compared to PPI results on Friday, which were way out in front of expectations, these figures are relatively mild. Then again, PPI numbers are often a forward indicator of future CPI prices.

Also, consider we’ve only just begun to embark on huge year-over-year comps improvements: once the pandemic reached our shores and our economy reacted by shutting down, we lost record numbers of jobs and posted record losses in quarterly GDP last year. We’re clearly going the opposite direction today, which means for as strong as our future economic data becomes over the next few months, it will look even gaudier when compared to the year-ago crater in economic development.

Today will be a big day for Fed Presidents offering their views and outlooks on the economy: Philadelphia’s Patrick Harker, San Francisco’s Mary Daly, Atlanta’s Raphael Bostic, Cleveland’s Loretta Mester and Richmond, VA’s Thomas Barkin will all chime in mid-day to bring their thinking to bear on how the Fed plans to navigate our new terrain. In fact, if inflation does finally make a lasting impression, it will be the first time in many years the Fed will have to deal with such a scenario.

U.S. Requests Pause to J&J Vax

Newsworthy this morning is federal health regulators requesting a pullback in administration from Johnson & Johnson’s (JNJ - Free Report) vaccine, the latest to hit the U.S. market via Emergency Use Authorization (EUA) and the only single-dose treatment for immunization from Covid-19. Six cases of blot clotting — literally one in a million — have been cited, and the government’s step this morning is seen as a precautionary measure. The vaccine’s EUA status has not been revoked.

J&J’s vaccine was intended to help bring the U.S. toward herd immunity with its single-shot treatment, as well as lead the global charge in ridding the world of Covid-19, with its relative easy storage requirements. Clearly, total vaccination projections will now need to be adjusted, and here in the U.S. we will remain reliant on both the Pfizer (PFE - Free Report) -BioNTech (BNTX - Free Report) and Moderna (MRNA - Free Report) two-dose vaccines to keep the spread at bay.

According to Dr Scott Gottlieb this morning on CNBC’s “Squawk Box,” the former FDA Commissioner expects this will likely be a couple weeks’ long delay for J&J; the vaccine may return shortly to the market with restrictions on the target population — including patients under the age of 30. He also made sure to point out that this is an early news report without much detail. Currently, JNJ is -2.8% ahead of the opening bell. PFE is +0.84% while BNTX has gained 2.3%. MRNA shares are up 5.4%.

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