Heading toward the start of today’s session, U.S. stock futures have moved into positive territory. In overnight trading, markets in Asia closed mostly to the upside. Meanwhile, the major European indexes are all showing gains. Elsewhere, oil prices have also moved higher, with West Texas Intermediate (WTI) up about 2.2%, to around $68.60 a barrel.
Stocks began the week with a push into the plus column, as investors appeared to be banking on the Federal Reserve taking a breather on rate hikes. The lead bank is set to conclude its two-day meeting on Wednesday. This morning, we got one more reading on inflation with the release of the Consumer Price Index (CPI) report for May. (The CPI measures the average change in prices for a market basket of consumer goods and services.) The rate of increase came in at 0.1%, down from 0.4% in April, and in line with consensus estimates. On an annualized basis, prices were up 4%. By comparison, the index posted an annualized increase of 9.1% when it peaked in June of 2022. However, when excluding food and energy prices, the “core” figure was up 0.4% in May, and 5.3% over the 12-month span. While the headline number places inflation a few steps closer to the Fed’s target of 2%, it does not rule out the possibility of an increase at its next meeting in late July.
Tomorrow brings the U.S. Bureau of Labor Statistics Produce Price Index (PPI), which measures the average change in selling prices garnered by domestic manufacturers. May’s reading is widely expected to show a modest decline from April’s 0.2% increase. Thursday’s docket contains a slew of reports including U.S. retail sales, industrial production, and capacity utilization for the month of May. The week then wraps up with the latest reading on consumer sentiment, for which the Street expects a slight uptick.
Summing up Monday’s price moves, stocks rallied to start the week. The Dow Jones Industrials gained 189 points (0.6%), while the broader S&P 500 moved 40 points higher (0.9%) and the tech-centered NASDAQ led the pack with an increase of 202 points (1.5%). The latter two marked their best close since April of last year. – Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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