US egg prices jumped two to threefold in January.
Fatih Act | Anadolu Agency | Getty Images
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American inflation has started knocking again. But stocks mostly shrugged it off.
what you need to know today
- January US Consumer Price Index rose 0.5%, higher than the 0.4% forecast by economists. On a year-on-year basis, prices increased by 6.4% compared to an estimated 6.2%. egg prices It was still sky.
- US stock Mixed Tuesday Off, The Dow Jones Industrial Average and the S&P 500 declined, while the Nasdaq Composite gained. After a positive trading day, Asia-Pacific shares mostly short endedOnly China’s Shanghai Composite and Shenzhen Component remained in the green.
- US Treasury Yield climbed After a hotter than expected inflation report. The 6-month Treasury, in particular, closed at 5.022%, its highest yield since July 2007.
- Supporter US Treasury yields are popping up again. The 10-year Treasury yield hit a five-week high this week, while the 2-year Treasury yield rose just 0.41 percent in February. how is it professional will play the market,
Bottom-line
A warmer than expected CPI report for January overshadowed US markets yesterday.
US prices rose faster than economists had expected last month; They were pushed back by high food, energy and housing costs. Yet the core CPI – which strips out the more volatile food and energy prices – saw a monthly jump of 0.4% and a 5.6% year-on-year increase. Both exceeded the respective estimates of 0.3% and 5.5%.
Is the deflationary process – in the words of Federal Reserve Chairman Jerome Powell – still underway in the US? January’s core CPI of 5.6% is a tiny notch lower than December’s 5.7%, which means prices are still falling. But barely.
US markets reacted accordingly. Treasury yields rose, suggesting investors are bracing for higher interest rate hikes by the Fed. Stock fell. The Dow fell 0.46% and the S&P fell 0.03%. However, the Nasdaq, traditionally the most interest rate-sensitive index, closed 0.57% higher, fueled by a 7.51% rise in Tesla and a 5.43% jump in Nvidia.
Although stocks were mostly down, they were remarkably resilient. A team at JP Morgan predicted that the S&P would sink between 0.75% and 1.5% when the annual CPI came in at 6.4%. Actual decline in the index: only 0.03%.
The strange separation between the bond markets and the stock markets continues. Investors can be optimistic that even amid rising prices, consumer spending will remain strong — as Coca-Cola’s earnings report indicated — therefore allowing the economy to grow. According to that theory, Wednesday’s US retail sales report will put it to the test.
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