US Stocks Ignore Rising Inflation
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Inflation in the US is starting to worsen again. But stocks pretty much brushed it off.
What you need to know today
- USA in January Consumer price index rose 0.5%, higher than the 0.4% forecast by economists. Year-on-year, the price rose 6.4% compared to his 6.2% forecast. egg price It was still sky high.
- US stocks Closed Tuesday MixedThe Dow Jones Industrial Average and S&P 500 edged lower, while the Nasdaq Composite rose.Asia-Pacific equities after strong trading day most ended up belowonly the Shanghai General and Shenzhen configurations of China remain green.
- US Treasury Yield climbed After a hotter-than-expected inflation report. Notably, 6-month Treasuries closed at 5.022%, the highest yield since July 2007.
- Professional US Treasury yields are rising again. Yields on 10-year Treasuries hit a five-week high this week, while 2-year Treasury yields rose 0.41 percentage points in February alone.like this the pros will play in the market.
Conclusion
January’s better-than-expected CPI report overshadowed the US market yesterday.
US prices rose faster than economists expected last month. They were boosted by rising food, energy and housing costs. Yet even the core CPI, which excludes more volatile food and energy prices, rose 0.4% month-on-month, up 5.6% year-on-year. Both topped him by 0.3% and he by 5.5% of their respective estimates.
In the words of Federal Reserve Chairman Jerome Powell, is the disinflationary process still underway in the US? means that the is still tapered. But barely.
The US market reacted accordingly. Higher Treasury yields suggest investors are pricing in higher rate hikes by the Federal Reserve. Stocks fell. The Dow fell 0.46% and the S&P he fell 0.03%. But the Nasdaq, traditionally the most rate-sensitive index, closed 0.57% higher, aided by Tesla’s 7.51% surge and Nvidia’s 5.43% jump.
Stocks almost fell, but they were surprisingly resilient. JP Morgan’s team predicted that the S&P would fall between 0.75% and 1.5% if the annual CPI hit 6.4%. Actual drop in index: Only 0.03%.
The bizarre disconnect between bond and stock markets continues. Investors may be optimistic that consumer spending will remain strong even as prices rise, which will keep the economy growing, as Coca-Cola’s earnings report shows. As for that theory, Wednesday’s US retail sales report puts it to the test.
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https://www.cnbc.com/2023/02/15/stock-markets-us-stocks-shrug-off-hot-inflation-numbers.html US Stocks Ignore Rising Inflation
