May 162024

The US Bureau of Labor Statistics (BLS) accidently published subsets of the Consumer Price Index to their website 30 minutes early yesterday.  BLS is subject to strict protocols to prevent early dissemination of potential market moving data.  What’s interesting is futures didn’t react to the CPI data until the official release time of 8:30am ET.  In other words, most traders tuned into the data at the scheduled time.

The CPI data showed inflation eased in April, raising hopes of Fed rate cuts.  However, the lower inflation numbers are probably not enough to change the Fed’s “higher for longer” stance.

FedWatch shows a September rate cut has a 53% chance versus a 45% chance before the CPI data.  Powell had said on Tuesday that his confidence that inflation will keep cooling is not as high as it was at the beginning of the year.

The CPI is now up over 19.4% over the three-plus years since Biden took office.  Inflation is a global issue over which the Biden administration has little control.  The Fed and other global central banks have pumped currencies into the global economies for decades and the Covid pandemic government spending has thrown fuel on the inflation fire.

The currency devaluations have come home to roost, making inflation difficult to control.  US consumers are feeling the inflationary pressures but are resistant to change their spending habits as confirmed by record credit card spending.  Inflation will be one of the central issues for the next Presidential election.

Bitcoin may be moving to trading on a regulated exchange.  The CME Group has been holding discussions with traders who want to buy and sell cryptocurrencies on a regulated marketplace.  The CME already hosts bitcoin futures, but the CME is looking into introducing spot bitcoin trading.  The interest is there, bitcoin ETFs are the fastest growing ETFs of all time.

Premarket earnings include BIDU, DE, JD, NICE, WMS, and Walmart (WMT).  Earnings after the bell include Applied Materials (AMAT), CPRT, and TTWO.

The economic calendar is full: Claims, Building Permits, Housing Starts, Philly Fed, and Import Prices @ 8:30am ET and Industrial Production and Capacity Utilization @ 9:15am ET.  Fed speakers include Barr @ 10:00am ET, Mester @ 12:00pm ET, and Bostic @ 3:50pm ET.

Volatility increased for the second day in a row on the bullish reaction to the CPI numbers.

No whale bias as overnight large trader volume was mixed and too light to be significant.


 Posted by at 6:36 am

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