APOLLO: A strong acceleration in SUPERCORE INFLATION...
“.. The 3-month annualized change in supercore inflation is now over 8% and accelerating .. the Fed is not done fighting inflation and rates will stay higher for longer. .. We are sticking to our view that the Fed will not cut rates in 2024.” [Slok] CPI Source: Carl Quintanilla
BREAKING >>> Oups... March CPI inflation rate RISES to 3.5%, above expectations of 3.4%. Core inflation beat as well...
-> The Headline CPI for March came in at +0.4% above expectations of +0.3% month-over-month. On a YoY basis, Headline CPI increased 3.5% vs. 3.4% expected and 3.2% in February. This follows January and February being hotter readings than expected. This is the highest headline CPI reading since last September. -> The core CPI (ex-food and energy) also came in above estimates: +0.4% MoM (vs. +0.3% estimates) and 3.8% yoy vs. 3.7% expected and 3.76% in February. This is the first uptick in core inflation since March 2023. Transportation prices are up +10.7% yoy; Shelter is up +5.7% yoy -> Even the "Supercore services" index which FED policymakers have been emphasizing, which strips out housing, ROSE +0.65% on the month, continuing the trend of higher prints. It is up 4.77% yoy, a 11 months high... -> The fed and Powell are not going to like it. This number might decrease rate cuts expectations even more (they have gone from 7 to less than 3 in just a few months). Could we see 0 rate cuts in 2024? Markets don't like it either as S&P 500 futures decreased 90 points in a matter of minutes. The US 10-year Treasury yield ip up +12 basis points to 4.49%. The 2-year is up +17 basis points to 4.91%...
What does a $1T data center upgrade cycle mean for copper demand?
Here is how to do the math 👇 Is copper not that scarce after all? Source: Visual Capitalist thru IVANA SPEAR
As shown by Meb Faber, holding 40% gold instead of US treasuries within your 60-40 portfolio would have delivered similar results as the 'traditional' 60-40 portfolio...
Going forward, with US Treasuries expected to be a poor diversifier due to supply overhang and sticky inflation, gold might prove to be even more useful within multi-assets portfolios.
US stocks are expensive. That is true, but it is mainly due to tech.
If you look around you'll notice that areas like the cyclicals (energy, financials, materials, and industrials) are all fairly valued and in some cases outright cheap. Source: Carson Investment Research
Here’s what Wall Street is expecting for US CPI today
Source: WSJ
JUST IN: Federal Reserve will cut interest rates by 50 basis points as soon as June and 150 points by the end of this year, says State Street in call against Wall Street consensus
Source: Bloomberg, radar
Breaking News: Fitch revises outlook on china to negative
Source: Bloomberg, David Ingles
