CPI And FOMC Minutes To Move Market On Wed π
Following the lackluster performance seen on Monday, stocks saw considerable volatility over the course of the trading session on Tuesday. the Nasdaq rose 52.68 points or 0.3 percent to 16,306.64 and the S&P 500 inched up 7.52 points or 0.1 percent to 5,209.91.
β οΈ Trading tips: Early trading on Wednesday will be driven by reaction to the consumer price inflation data, while the Fed minutes may attract attention after 2pm. Looking at QQQ puts below 442 and calls above 443.50.
Volatility from CPI data at 8:30am
Traders will be watching to see if consumer prices extend their recent stretch of hotter-than-expected inflation. Evidence of persistently stubborn inflation could reinforce growing doubts that the Federal Reserve will cut interest rates multiple times this year.
"CPI coming in a little stronger than where they'd like it to be is nudging them ever so slightly toward keeping rates higher for longer," said Jason Pride, chief of investment strategy and research at Glenmede.
Economists expect Wednesday's inflation report to show that consumer prices rose 3.4% in March from a year earlier, up from a 3.2% rate in February. Both the February and January reports showed inflation had been hotter than anticipated.
The S&P 500 rose after the opening bell but turned lower to spend much of the session in the red before ending the day higher. The broad U.S. stock index added 0.1%, with nine of its 11 sectors gaining ground. Only the financials and industrials groups declined.
The Dow Jones Industrial Average fell less than 0.1%, or about 9 points, while the tech-heavy Nasdaq Composite gained 0.3%.
The latest employment report on Friday showed the economy added a seasonally adjusted 303,000 jobs in March, far above the 200,000 economists had predicted. While a strong economy is generally good news for business, investors are scrutinizing incoming data for signs that activity is so vigorous it could thwart the central bank's campaign to tame inflation.
"The economy is still running hotter than the Fed would like," said Jim Baird, chief investment officer at Plante Moran Financial Advisors. "Inflation is still stubbornly too high by virtually any measure, and the employment market is still pretty robust."
The major indexes have slipped to start the second quarter, leaving the S&P 500 up 9.2% in 2024 and the Dow industrials up 3.2%.
Some investors think the recent choppiness in trading overlooks a sound economic backdrop, despite any concerns over the exact number of interest-rate cuts the central bank delivers in 2024.
"Not only do you have resilient growth, but you do have a Fed that is in a position of being able to cut rates," said Nanette Abuhoff Jacobson, global investment strategist at Hartford Funds. "If anything negative happens to the market, they have the option to protect it, if you will, by delivering cuts."
Wednesday will also see the release of the minutes of the Fed's latest monetary policy meeting, which could also shed additional light on officials' thinking on rates.
"The central bank wants to see sustained evidence of inflation coming down and that doesn't appear to be on the menu," said Dan Coatsworth, investment analyst at AJ Bell.
"The signs are clear for investors to see, but many have been choosing to ignore them," he added. "The Fed putting it into black and white could be a difficult pill for investors to swallow, so brace yourself for turbulence on the market this week."
-In bond markets, the yield on the benchmark 10-year U.S. Treasury note slipped to 4.365%, from 4.422% Monday. That was the highest 3 p.m. yield since November.
-Gold prices climbed 0.5% to $2,343.50 a troy ounce, a third consecutive record close. Shares of gold miners Newmont and Barrick Gold rose 0.7% and 1.7%, respectively.
-Oil prices slipped, with Brent crude, the global benchmark, falling 1.1% to $89.42 a barrel.
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Jow will figure it out. He's the best leader the U.S. has ever had.
Letβs see how the market react today!!!