Morning Minutes

Stocks Climb as US Inflation Pressures Ease




US index futures, the FTSE, and the Dax, are trading flat to up 0.25% this morning as investors digest a slightly better than expected US Consumer Price Index inflation report (4.0% vs street 4.1% and previous 4.9%). Core inflation, excluding food and energy, also showed signs of easing (5.3% vs previous 5.5%). A significant decline in inflation pressures from last month would appear to give the Fed scope to pause interest rates at tomorrow’s meeting.

It would appear that lingering fears that the Fed could surprise markets and announce another rate hike, stoked by last week’s Bank of Canada and RBA surprise hikes, have been mostly extinguished by today’s CPI report as WTI Crude Oil is up 2.5% and Copper is up 2.75%. Ahead of the Fed tomorrow, the US Producer Price Index report is due.  

A potentially big merger in agriculture has been announced this morning. Bunge (BG) has agreed to purchase Viterra (formerly known as Saskatchewan Wheat Pool) from its parent Glencore for $8.2B to create a combined company with an estimated value of $34B. In earnings news, Oracle* is up 5.8% premarket after beating expectations on earnings ($1.67 vs street $1.58) and sales. Next up is homebuilder Lennar who reports after the close tomorrow.

* Shares of Oracle Corp. are held in portfolios managed by SIA Wealth Management

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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