Friends
The much-anticipated CPI report gave the bulls a boost this morning as month over month the headline CPI number was unchanged. That was better than expected and the first month we haven’t seen a rise in inflation in a while. The core number was up .3% vs. the .5% that had been anticipated and year over year the inflation number was up 8.5% vs. the 8.7% that had been anticipated. These numbers aren’t much to celebrate other than the fact that we might have at least seen the peak in inflation. That’s a start and today’s CPI number combined with last week’s much better than expected jobs picture, fed the “soft landing” narrative. Could we see inflation now start to abate while not doing too much damage to the economy? Well, at least for today, the bulls were emboldened.
By the close, the Dow Jones Industrial Average was up 535 points to finish the day at 33,309. The S&P 500 was up 87 points to close at 4,210. The Nasdaq Composite Index was up 360 points to close at 12,854. Gold was down $7 to trade at $1,805 per ounce, while oil was up $1.21 to trade at $ 91.71 per barrel WTI.
Now with both the CPI data and the jobs data in the rear-view mirror market participants will be spending the next several weeks trying to determine what the Fed will do in September. Will they raise the Fed Funds rate by 75 basis points? After Friday’s jobs report pundits were predicting 100 basis points. Today they are backing off to 50 basis points. Let the guessing begin.
Have a nice evening everyone.
