We enter the final pre-market session of the week with some hopefulness: at our current rate, we look to close major indexes in the green for the week. Although since economic data has hit the tape ahead of the opening bell, we’ve thus far trimmed gains: the Dow is +2 points, the S&P 500 +5, the Nasdaq +40 points and the small-cap Russell 2000 is +3.
Inflation Rate Jumps to +3.3% in March
Month over month Consumer Price Index (CPI) figures came in as expected: much higher. Headline +0.9% was 3x the prior month’s unrevised +0.3% — you get three guesses why this happened, and the first two don’t count. Ex-food and energy costs, this figure drops to +0.2%, matching the prior month and 10 basis points (bps) below estimates.
Year-over-year CPI is also known as the Inflation Rate, and here we scale the highest peak in nearly two years: +3.3%, exactly as expected and up +0.9% from February’s +2.4%. Core year-over-year also came in 10 bps below expectations to +2.6%, equaling where we were in December of last year.
Obviously, the culprit is higher oil prices due to the attack on Iran at the very end of February. Gasoline prices are up +21.2%, and Energy in general is +10.9%. Thankfully for this set of figures, Food came in at 0.0% for the month and Used Cars were -0.4%. Services (ex-Housing) was +0.2%, which was up, but manageably so.
Worse, March inflation figures represent the mere precipice of our current condition. With the Strait of Hormuz effectively shut for the near-term foreseeable future, we can expect to see things like Fertilizer costs go up. It would therefore stand to reason that Food costs won’t stay at 0%. In short, inflation metrics promise to go up from here in the near term, not down.
Perhaps installing a new Fed Chair in May will bring something close to a remedy for this: instead of current Fed Chair Jerome Powell’s long-time insistence that the goal is +2.0% inflation, if incoming Fed Chair Kevin Warsh lifts that to, say, +3.0%, then today’s +3.3% Inflation Rate won’t look quite as bad. Cold comfort to the average American household, I suppose, but we’re all going to need to be on point to navigate our way forward.
What to Expect from the Stock Market Today
Talks will continue, we presume, regarding a cease fire between Iran, the U.S. and Israel. Thus far, not all of these nations have necessarily been on the same page. It will be something worth keeping attention on during the course of the trading day, over the weekend, into Q1 earnings season next week and beyond.
A delayed Factory Orders report is expected a half-hour after the open, with February expected to have ticked up +10 bps to +0.2%. Also, a preliminary print from the University of Michigan Consumer Sentiment report for April is anticipated to come down to +52.0 from 55.5 previously — still above the crucial +50 level which connotes growth.
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CPI Increased More Than Expected
We enter the final pre-market session of the week with some hopefulness: at our current rate, we look to close major indexes in the green for the week. Although since economic data has hit the tape ahead of the opening bell, we’ve thus far trimmed gains: the Dow is +2 points, the S&P 500 +5, the Nasdaq +40 points and the small-cap Russell 2000 is +3.
Inflation Rate Jumps to +3.3% in March
Month over month Consumer Price Index (CPI) figures came in as expected: much higher. Headline +0.9% was 3x the prior month’s unrevised +0.3% — you get three guesses why this happened, and the first two don’t count. Ex-food and energy costs, this figure drops to +0.2%, matching the prior month and 10 basis points (bps) below estimates.
Year-over-year CPI is also known as the Inflation Rate, and here we scale the highest peak in nearly two years: +3.3%, exactly as expected and up +0.9% from February’s +2.4%. Core year-over-year also came in 10 bps below expectations to +2.6%, equaling where we were in December of last year.
Obviously, the culprit is higher oil prices due to the attack on Iran at the very end of February. Gasoline prices are up +21.2%, and Energy in general is +10.9%. Thankfully for this set of figures, Food came in at 0.0% for the month and Used Cars were -0.4%. Services (ex-Housing) was +0.2%, which was up, but manageably so.
Worse, March inflation figures represent the mere precipice of our current condition. With the Strait of Hormuz effectively shut for the near-term foreseeable future, we can expect to see things like Fertilizer costs go up. It would therefore stand to reason that Food costs won’t stay at 0%. In short, inflation metrics promise to go up from here in the near term, not down.
Perhaps installing a new Fed Chair in May will bring something close to a remedy for this: instead of current Fed Chair Jerome Powell’s long-time insistence that the goal is +2.0% inflation, if incoming Fed Chair Kevin Warsh lifts that to, say, +3.0%, then today’s +3.3% Inflation Rate won’t look quite as bad. Cold comfort to the average American household, I suppose, but we’re all going to need to be on point to navigate our way forward.
What to Expect from the Stock Market Today
Talks will continue, we presume, regarding a cease fire between Iran, the U.S. and Israel. Thus far, not all of these nations have necessarily been on the same page. It will be something worth keeping attention on during the course of the trading day, over the weekend, into Q1 earnings season next week and beyond.
A delayed Factory Orders report is expected a half-hour after the open, with February expected to have ticked up +10 bps to +0.2%. Also, a preliminary print from the University of Michigan Consumer Sentiment report for April is anticipated to come down to +52.0 from 55.5 previously — still above the crucial +50 level which connotes growth.