Friends
We teed up the CPI number for you yesterday and sure enough it came in on the hot side of our range. Month over month we saw the CPI up .4 vs. the .3 that was expected, and the all-important year over year number came in up 3.5% vs. the 3.4% expected. Stocks tumbled and interest rates moved higher. That was not unexpected. The hope/expectations of Fed rate cuts continue to at least be pushed off further into the future if not cancelled altogether. Despite good earnings and a better-than-expected economy, the bulls wanted an accommodative Fed in 2024. For the moment it appears that they might not get what they wanted, so will good earnings be enough to keep stocks moving higher? We will see.
For the day, the Dow Jones Industrial Average was down 422 points to close at 38,461. The S&P 500 was down 49 points to close at 5,160. The Nasdaq Composite Index was down 136 points to close at 16,170. Gold was down $14 to trade at $2,347 per ounce, while oil was up $1.00 to trade at $86.23 per barrel WTI.
We get a look at the Producer Price Index tomorrow which looks at prices at the wholesale level. But today’s CPI makes it nearly impossible for the Fed to begin to cut rates anytime real soon. It doesn’t mean that stocks can’t continue higher this year, but it makes it more difficult. Let’s see how the rest of this week plays out first. Remember, earnings season is about to begin.
Have a nice evening everyone.
Jim
