CPI Tomorrow Morning Outlines This Week
Good morning.?With CPI this morning before markets open, it's set to be an extremely volatile day. Many EV stocks based out of China like NIO and XPEG shot up today on the back of Tesla after it reached some highs that formed in 2022.
—?Robert Baggetta?| Day Trader | Economic Writer | Finance Student |
Stock data as of market close, cryptocurrency data as of 8:27 pm ET.?
Markets:?Markets have gone even higher as FOMC week takes a stand. Major AI-related companies like ADBE have earnings this week and just today they shot up almost 5% on the back of good earnings predictions. With support from inflation data tomorrow morning, it will likely be a catalyst to the decision on prices for the FOMC interest rate decision on Wednesday.
don't trade the news
ECONOMICS
CPI Report Should Forcast Interest Rate Decision
With CPI set for tomorrow, everybody on Wall Street is sleeping at their desks because whatever is announced in terms of inflation reports will likely be the catalyst of the prediction for the FOMC meeting Wednesday. If inflation is easing they will pause the hike and keep it constant...if inflation rises, well...it won't be necessarily good for markets nor the economy.
With Oil and Energy prices dropping drastically over the past couple of weeks, it leaves the conclusion hanging of whether or not core indexes have finally changed.
Quote: "Headline CPI inflation should decelerate to 4.0% in the 12 months through May, from 4.9% prior, mainly due to large negative base effects, as elevated oil prices last year following Russia’s invasion of Ukraine roll out of the 12-month window. Core inflation should slow to 5.2% from 5.5%"
Overall Expectation For CPI Tomorrow: Down
"Bond Traders Are...Wrong?"
People from Citi group are saying Bond traders are extremely wrong and that the market for bonds pricing in the rate hike for this week is completely off target. The assumption is based on the fact that inflation has dropped last month but we would only know that tomorrow. It's also based off historic price action relative to January...
Even though the swaps market is also pricing in a rate hike of about 24bps, CPI seems to be trending lower and these types of plays might get squeezed out big time.
Canada's Big Mess
So as we all know, Canada raised their interest rate last week and it had people kind of angry because everything was so damn expensive already and its only going to get more expensive...(kind of the whole point of monetary contraction btw).
But economists are worried that the BOC is really not doing anything right at all. Basically, they raised the interest rate, but they aren't reducing spending. This in turn causes the higher interest rate to stay around for longer because it doesn't have that extra catalyst of lower spending to help lower inflation on the larger time frame.
This confluence is quoted as "dirty work" by the Canadian government because well...they aren't doing their job correctly (according to many economists).
STOCK MARKET
What's This Fancy New Company The Nasdaq Bought?
Adenza, previously owned by Private Equity firm Thoma Bravo is a "regulatory tech company for banks and brokerages." Bought for $10.5 bn the deal is supposed to broaden the perspective of the Nasdaq and expose it to more leading software companies that enhance the Nasdaq in terms of leadership in the financial system as a whole.
Microsoft Won't Get Away With The Monopoly That Easily
In Microsoft's effort to purchase Activision Blizzard, the FTC has come in with a lawsuit to try and stop the deal with an opposing side to the monopolizing situation. This is a $70bn purchase so the market share acquired by MFST would be quite massive in terms of the broader landscape.
Quote: "The all-cash deal announced in January 2022 has been scrutinized by regulators around the world over?fears that it would give Microsoft and its Xbox console control?of Activision's hit franchises and give it an unfair boost in the emerging business of cloud-based game subscriptions. It could be the priciest tech industry merger in history."
A deal of this magnitude would put some damage on companies like Sony who aren't exactly in a position to make moves that large.
领英推荐
What This Week Holds...
Key Economic Events
Tuesday, June 13
Wednesday, June 14
Thursday, June 15
Friday, June 16
Important Company Earnings
CHIPS - QUIET STUFF
CPI tomorrow so stay defensive...play what the market gives you.
JPMorgan Chase & Co. (JPM, $141.00)
JPMorgan & Chase has been on my radar for some time because of its massive base box on weekly charts. With a move towards the top right of the box (Potential breakout opportunity), if JPM forces its hand above 144 and holds, it can see 152 levels and then as high as 160 levels.
With all this mess on inflation, JPM is one of the strongest if not the strongest banks right now along with Goldman Sacs (In my opinion).
CPI and FOMC data should hedge JPM for gains or losses this week...play price as it lies.
The Goldman Sachs Group, Inc. (GS, $339.49)
As I just mentioned, GS is the other strongest bank I think will persevere through the mild recession we are bound to face. Right now until GS breaks and holds above 347, as long as it holds above 338 (which it closed above today) it can see that move to 347...break and hold above that can see move to 360.
Even with commercial loan troubles as stated by Elon Musk, GS is still well positioned and well hedged for future catastrophe (if ever faced).
Zone To Zone Trade Right Now...
*This isn't Financial Advise, please do your own research*
*Message me for more plays*
Plays this week include:?GOOGL, DIA, SHOP, SQ, JPM, XLF, GS, MA, V
THANKS FOR READING THE ECONOMIC PULSE. SUBSCRIBE FOR MORE DETAILS ON THE ECONOMY AND NEWS AROUND THE GLOBE