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"Off the Cuff" - Markets were set to open in the green, but then the PPI inflation figure came out. It showed a little bit higher pick up in inflation than expected mostly attributable to energy costs much like the CPI on Tuesday. Yields began to move higher quickly after this with the 10-year Treasury yield closing back up to 4.3%. A slightly weaker retail spending number along with a tight weekly jobless claim figure contributed to the down day. Why is all this economic data important? Because stickier inflation and tight labor markets give the Fed reason to keep interest rates higher for longer and the markets are expecting rate cuts this year. There is still a good probability that the Fed cuts rates by 0.75-1% by year end, but the markets want it sooner rather than later. A late day buy program brought the major averages off the lows of the day, but the Nasdaq finished lower by 0.30%, the S&P dropped 0.29%, the Dow fell 0.35%, while the Russell 2000 small-cap index was down by 1.96% because it is more directly affected by the rise in yields and is waiting for the interest rate cut catalyst to begin. The VIX jumped over 4% to 14.40. Oil jumped by 1.9% in a continuation of the weak inventory levels to $81.23. Not good for future inflation numbers. Just two of the eleven major sectors were positive today. Real estate, a very interest rate sensitive sector, was the worst perfomer. Natural Resources, Copper, and Travel sub-sectors managed to finish in the green today. Two earnings of note after the close are from Adobe and Ulta Beauty. There is one earnings report to watch in the morning and that is from Jabil. The only economic numbers to watch tomorrow are industrial production and manufacturing. As always, if you have any questions regarding the information in this email, please don't hesitate to contact me. Content curated and written daily by Douglas Emitte Follow me on LinkedIn for "Off the Cuff" and other important news.

"Off the Cuff" - A mixed day of economic data following nearly two weeks of nice gains produced a day of flat to slightly down major averages. The weekly jobless claims were fractionally higher, but housing data was worse than expected as were the manufacturing figures. The Nasdaq was down 0.26%, the S&P dropped 0.21%, the Dow was off 0.10%, and the Russell gave back 0.63%. The VIX was down a 1/4% and doesn't suggest much volatility 30 days out. Yields were up slightly to 4.38% and oil gained nearly 1% to $79.36. Fed speak didn't help the markets today either as the rhetoric remained the same "higher for longer" on interest rates. Just one of the eleven major sectors finished in the green and it was the most defensive, consumer staples. There were a few sub-sectors that did finish in the green today. Those were Specialty Real Estate, Lithium, Rare Earth Metals, and Online Retail. Earnings of note after the close are from Applied Materials, Copart, and Take-Two-Interactive. There are no earnings or economic figures of note in the morning. Tomorrow could be a volatile day if past statistics are any indication, and they usually are because tomorrow is option expiration day. As always, if you have any questions regarding the information in this email, please don't hesitate to contact me. Content curated and written daily by Douglas Emitte Follow me on LinkedIn for "Off the Cuff" and other important news.

Strong economic data on Monday led to an increase in industrial activity, along with a decrease in the probability of an interest rate cut to 56.3% compared to 63.8% last week. All of the previous factors, in addition to inflation fears, led to a noticeable decline in the market, as both the Dow Jones index and the US index fell. The S&P 500 and Nasdaq fell to -0.25%, -0.61%, and -0.25%, respectively. Do you expect the market to recover from this decline to maintain its upward path? 📈 🤔

Global stocks lost some of their upwards momentum as hotter than anticipated inflation reports dampened expectations of interest rates cuts ahead of key central bank meetings this week. The blue-chip S&P 500 and technology focussed Nasdaq indices gained 0.6% and 0.5% respectively. On Tuesday it was revealed that annual US consumer price inflation unexpectedly accelerated in February to 3.2% and further away from the Federal Reserve’s 2% target rate. The increase was driven by higher accommodation costs, as well as prices for services such as healthcare and motor insurance. A couple of days later, the US Producer Price Index report for February also exceeded forecasts. Wholesale prices increased 1.6% from a year earlier, the fastest rate since September, on the back of higher fuel and food costs. Continue reading here: https://lnkd.in/e8DggpsX

Last week was mostly positive for the US market! The S&P 500 stayed almost flat (-0.14%), while the Nasdaq hit a new record high! The Dow had a small dip (-0.77%) but still had its best week this year. The big news? The Fed kept rates the same, but signaled potential cuts later in 2024. ✂️ This helped stocks rise throughout the week. Looking ahead, this week brings key economic data: 🔸Durable Goods report on Tuesday (tells us about business investment) 🔸Core PCE price index on Friday (inflation data the Fed watches closely) 🔸We'll also see the GDP report for Q4 2023, earnings reports, and speeches from Fed officials. ️ In the meantime , give it a read to this comprehensive report from the UBS. Stay tuned for more!

Chart of the day: If you think the US economy is decelerating, think again, it is actually re-accelerating. We heard recently of a report published by Goldman Sachs in which the analyst of the investment bank argues that the recent drop in the ten-year rate by almost 80 bps and the rally of the stock market back to its all time high have both caused the financial conditions in the USA to ease by the equivalent of 75 bps cuts in the Fed Funds Rate. We took the liberty to test their findings. We took the SP 500 divided by the VIX -YoY change- and chart it against the ISM manufacturing. The chart below is what we got. A large number of market participants have totally ignored the Chicago Manufacturing Index level at 55 and the ISM non manufacturing index new orders at 55.2 for the month of November. Will the Fed make the mistake to pivot too early? In an election year, they might very well do so but it will prove to be a terrible mistake. https://lnkd.in/dMVvSv3a #FCI #Goldmansachs #GDP #Fed

Wall Street witnessed a record-breaking week, primarily driven by the latest consumer inflation data. On Wednesday, the headline consumer price index (CPI) for April increased at a slower-than-anticipated rate, while the core CPI cooled for the first time since October 2023. Following the data, markets were off to the races as investors ramped up their Federal Reserve interest rate-cut bets. The positive sentiment pushed the benchmark S&P 500 (SP500) above the 5,300-point level for the first time ever. The post-CPI euphoria stalled somewhat over the final two days of the week, but a stellar earnings report from Walmart (WMT) was enough of a catalyst to push the venerable Dow Jones Industrial Average (DJI) past 40,000 points on Thursday in a historic first. For the week, the S&P 500 (SP500) added +1.5%, the blue-chip Dow (DJI) rose +1.2%, and the tech-heavy Nasdaq Composite (COMP:IND) climbed +2.1%.