US futures soar as inflation shows signs of easing

U.S. stocks were firm on Wednesday, aiming for new highs as weak consumer price data raised expectations that the Federal Reserve could cut interest rates sooner than expected. .

Futures prices for the Dow Jones Industrial Average (YM=F) rose about 0.4%, and futures prices for the S&P 500 Index (ES=F) rose 0.5%. The number of contracts on the Nasdaq 100 (NQ=F) rose 0.4% as tech stocks hit new highs.

As Yahoo Finance's Allie Canal reported, the consumer price index rose 0.3% month over month and 3.4% year over year in April, slowing from March. “Core” inflation, which subtracts the cost of food and gasoline, rose at the slowest annual pace in 2024.

Stocks are rising amid renewed confidence that the U.S. economy is in good enough shape for the Federal Reserve to begin lowering interest rates from their current historic highs. This optimism is fueling a bullish resurgence in the market.

On other macroeconomic fronts, retail sales were just flat last month, well below Wall Street expectations. The report could raise new questions about the health of U.S. consumers.

read more: How does the labor market affect inflation?

Meanwhile, the rally in frenzied meme stocks that saw GameStop (GME) and AMC (AMC) more than double in price at one point on Tuesday has slowed. Both stocks fell more than 10% in premarket trading.

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Wednesday, May 15, 2024 05:54 PDT

April retail sales flat, below Wall Street expectations

US consumers showed signs of slowing in April.

Retail sales were flat for the month, data from the Commerce Department showed, adding to concerns about the situation for consumers amid persistently high inflation and rising interest rates.

This was a slowdown from March's 0.6% month-on-month increase. Economists had expected spending to rise 0.4%, according to Bloomberg data.

Retail sales, excluding autos and gasoline, fell 0.1% last month. The forecast was for a rise of 0.1%.
Wednesday, May 15, 2024 05:52 PDT

Inflation pressures ease in April

U.S. consumer price increases slowed during April, according to the latest Bureau of Labor Statistics data released Wednesday morning.

The Consumer Price Index (CPI) in April increased by 0.3% month-on-month and 3.4% year-on-year, a slight deceleration from March's annual rate of increase of 3.5% and 0.4% month-on-month increase.

The month-on-month increase in April was lower than the 0.4% increase expected by economists. Price increases for the year were in line with expectations, according to Bloomberg data.

On a “core” basis, which excludes volatile food and gas prices, prices in April rose 0.3% month-on-month and 3.6% year-on-year, lower than the March data. Both measures met economists' expectations.
Wednesday, May 15, 2024 02:12 PDT

Well, at least the valuation isn't exaggerated.

As we've seen GameStop (GME) rise another 8% pre-market, it's worth noting that these wild bubble moves haven't spread across the broader market.

That may be reflected in this nifty new valuation chart released this morning by Goldman Sachs.

Do attractive valuations still exist? (Goldman Sachs)