Friends
Today’s Consumer Price Index data came in a little hotter than expected. Yes, year over year we are still seeing a decline in inflation, but the pace of that decline is glacial. We have seen inflation go from a pace of 9.1% last June to 6.4% today. Again, the decline is nice, but 6.4% is still high which likely confirms the Fed’s mantra “higher for longer”. It is possible that we will only see one or two more quarter points rate hikes in the Fed Funds rate in the next two FOMC meetings. But those hoping/expecting a quick Fed pivot to a more dovish stance will likely be kept waiting for a while.
Stocks could not figure out which way to go after the CPI release. Prices moved higher, then decisively lower only to see most of those losses erased in the afternoon. By the close, the Dow Jones Industrial Average was down 156 points to finish the day at 34,089. The S&P 500 was down 1 point to close at 4,136. The Nasdaq Composite Index was up 68 points to close at 11,960. Gold was up $3 to trade at $1,866 per ounce, while oil was down $.98 to trade at $79.16 per barrel WTI.
The move higher since the beginning of the year in stocks seems a bit played at the moment, but the bears continue to find it difficult to get things moving lower with any conviction also. It’s possible that we’ll continue to watch this tug-of-war playout for a while, at least until more evidence is gathered as to whether we will get the long-awaited recession that pundits have been calling for. Stay tuned.
Have a nice evening everyone.
