Inflation Declined In March, But Remains High

Inflation Declined In March, But Remains High. Inflation remains well above the Fed’s 2-percent average inflation target. Core inflation, which excludes volatile food and energy prices, also remained elevated. The latest numbers will do little to sway members of the Federal Open Market Committee.

Retail Sales Data Suggests A Strong Consumer, Or Does It

March retail sales data suggests a robust consumer, leading economists to become more optimistic about economic growth this year. Retail sales data was extraordinarily weak from October to January, the traditionally strongest shopping months of the year. Lance Roberts says to remain cautious about economic exuberance. He says the March retail sales report was NOT adjusted for inflation.

Is The Hot Inflation Data In Q1 Noise Or Signal?

The Turn Is Coming

The 10yr minus 3mo Treasury rate is moving higher at a rapid pace. 88% of portfolio managers in the Bank of America Fund Managers Survey last week believed lower rates were ahead. I believe we are seeing a long-awaited turn away from the single focus of high tech as the only option for investors. Positive economic activity is the primary driver of the 10yr Treasury rate and core industrials.

U.S. Economic Growth Plunges In First Quarter 2024

Home Market Outlook Economy Analysis U.S. Economic Growth Plunges In First Quarter 2024. The release of 1st quarter 2024 Gross Domestic Product surprised virtually all forecasters. The first three months of 2024 were characterized by a notable deceleration in US economic growth, marking an almost two-year low.

U.S. Inflation Not As Bad As Feared, But Still Too Hot

U.S. Inflation Not As Bad As Feared, But Still Too Hot in the first quarter. The core PCE deflator came in at 0.3% month-on-month, up from 0.2%. Inflation is still too hot and September remains the earliest opportunity for an interest rate cut.

Weekly Commentary: Opposite Day

The Semiconductor Index surged 9.9%, more than recovering from last week's 9.2% drubbing. The Bank of Japan just can't stop playing with fire. Short squeezes are alive and well. Tesla surged 14.4% this week. The bulls have plenty of fight.

Fed Likely To Hold Rates Steady And Warn Of The Risk Of Delay To Cuts

Inflation and strong activity and jobs numbers have pushed the timing of the first interest rate cut to December. The Federal Reserve will remain wary and signal that if inflation stays high, so will interest rates. ING sees an opportunity for a September rate cut. The Fed likely to hold rates steady and warn of the risk of a delay to cuts.

Equity Factor Report - Q1 2024: Momentum Strategies Shine

Strong investor sentiment and continued economic strength led momentum strategies to outperform in Q1 2024. The MSCI All Country World Index rose by 8.3% in the first quarter. Russell Investments' Factor Portfolios like Global Large Cap Growth, Momentum, and Quality outperformed the MSCi ACWI.

These Three Metrics Tell A Story About The U.S. Economy

Major US indices down for the month, NASDAQ-100 hit with a 7.10% drawdown. Inflation, GDP, and unemployment are the big three metrics used to approximate the trajectory of the U.S. Economy. This month, the Consumer Price Index rose by 3.48% year-over-year. The Federal Funds Rate is expected to stay at current levels.

The Odds For Rate Hikes May Have Increased Dramatically

Inflation is accelerating, with core PCE and PCE Supercore rising at higher rates. Consumer inflation expectations are increasing. The current policy stance may need to shift from rate cuts to rate hikes if inflation continues to rise. The odds for rate cuts in 2024 are melting away.

Fed Meeting Preview: Unexpected Macro Data Likely To Alter Fedspeak

US economy grew at 1.6% in Q1 2024, the slowest rate of growth in seven quarters. The latest GDP print came in lower than expected while inflation has inched up. Changes in Fedspeak are anticipated as the Fed meets this week. The Fed's preferred measure of inflation is still the labor market.

Consumers Splurge On Services, Fixed Investment Surges, Imports Drag On GDP And There's A Blip In Government Spending

Wolf Richter: In Q1 2024, consumers spent very vigorously on services, but not so vigorously on goods. Imports and government spending dragged on GDP, but we think the slowdown in government spending was just a blip. Inflation re-accelerated sharply in Q1, and GDP grew less than in Q4. Gross private investment jumped at fastest rate in two years.

GDP Update: Moderate Growth And Disinflation Continue

Real GDP is growing at about a 2.2% annual pace. On a year-over-year basis, the deflator rose only 2.4%. The economy today is about 20% smaller than it could have been. Calafia Beach Pundit sees no reason to worry about a near-term recession.

M2 Still Points To Lower Inflation

Between The Lines

U.S. GDP Growth Slows Markedly, And Inflation Remains The Focus

U.S. GDP growth slowed to 1.6% annualised in the first quarter of this year. But inflation is hotter than expected, with the core PCE deflator up 3.7%. Inflation makes a near-term Federal Reserve interest rate cut look less likely. First quarter GDP growth is well below the 2.5% consensus.

Money Supply Sees Major Jump In Recent Weeks

Money Supply Sees Major Jump In Recent Weeks. Money Supply should dip some heading into the summer before rebounding later in the year. The large increase in seasonally adjusted Money Supply occurred in March. The drop in reverse repos is driving Money Supply and the stock market higher.

Bears Come Out Of Hibernation

This week's AAII Sentiment Survey saw only 32.1% of respondents report as bullish, the lowest percentage since 11/2/23. Bearish sentiment has picked up to 34%. This is the highest bearish sentiment reading since last November. The bull-bear spread has been pushed into negative territory for the first time since 11-3.

Riding The Momentum - Looking Beyond The Tech Giants

Home Market Outlook Today's Market Riding The Momentum - Looking Beyond The Tech Giants. BlackRock Systematic's Systematic Equity Outlook explores macro and micro risks. The persistence of persistent market themes like AI has contributed to high equity index concentration and strong performance of the momentum factor. Inflation and rising geopolitical risks dominate the equity market narrative.