Traders Focus On Inflation Improvement Instead of a Weakening Economy

US index futures initially jumped up 0.3%-0.6% from flat this morning but have seen that whittled back to 0.2%-0.4% in the wake of today’s US economic reports. The US 10-year treasury note yield has dropped from near 4.45% toward 4.35%.

Traders have primarily focused on slightly improved US consumer price data hoping that could be a sign improving inflation could enable the Fed to start cutting interest rates, despite all of the ongoing “higher for longer” talk from central bankers this week including Fed Chair Powell yesterday. On a monthly basis, US consumer prices rose slightly less than expected (0.3% vs street 0.4%), while over a year ago, US consumer prices improved slightly (3.4% in line vs previous 3.5%).

This all seems like much ado about nothing, particularly in the context of all the other disappointing economic numbers that came out this morning which suggest ongoing stagflation. US retail sales growth flatlined and was even worse than expected (0.0% vs street 0.4% and previous 0.6%). The US Empire Manufacturing Survey showed an even deeper contraction than feared (-15.6 vs street -10.0), and Canada manufacturing sales fell more than feared (-2.1% vs street -1.4% and previous 0.9%).

The first day of housing market data for this month finds Canada housing starts stable at 240K slightly more than expected and slightly less than last month. The US NAHB Housing Market Index (street 51 unchanged) is due at 10:00 am EDT.

Trading in meme stocks has cooled off today. GameStop is down 7.6% premarket after soaring 60.1% yesterday. AMC Entertainment, who smartly used this week’s pop as an opportunity to raise $250 million in capital, is down 9.9% after popping 32.0% yesterday. Earnings season picks up again later today with Cisco Systems reporting after the close tonight and Walmart reporting before the open tomorrow.

Copper continues to steamroll forward. It traded above $5.00/lb briefly earlier this morning and is still up 0.8% today. Metals continue to attract interest in general with Silver up 0.8%, Platinum up 0.6% and Gold up 0.3%. Energy trading is mixed with US Crude Oil down 0.4% despite a surprise drawdown in API weekly Crude Oil inventories, while Natural Gas is up 1.6%.

Terms and Conditions:

This information is for Investment Advisors only. The website is for informational purposes only and is not intended to provide a complete description of SIA Wealth Management’s products or services. Past performance is not indicative of future results. It should not be construed as investment advice or relied upon in making an investment decision. Products and services of SIA Wealth Management are only offered in jurisdictions where they may be lawfully offered for sale. The information contained in this Website does not constitute an offer or solicitation by anyone to buy or sell any investment fund or other product, service or information to anyone in any jurisdiction in which an offer or solicitation is not authorized or cannot be legally made or to any person to whom it is unlawful to make an offer of solicitation. All products and services are subject to the terms of each and every applicable agreement. It is important to note that not all products, services and information are available in all jurisdictions outside Canada.

SIA Wealth Management Inc. (SIAWM) specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, Advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIA Wealth Management Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.