Morning Reads

Morning Reads





Data mining

"The incoming data will guide our decisions." That's been the tagline of the Federal Reserve since the central bank paused its rate hike cycle nearly ten months ago. The stance has left investors guessing the future of the Fed's policy path, with many eager to predict what is in store and how it will impact the market.

Final countdown: The central bank is about to get its latest dose of inflation numbers this morning, with the Consumer Price Index to be released at 8:30 AM ET. After strong prints in January and February, the new figures will be a deciding factor as to whether the two previous months were a "bump in the road" toward the 2% inflation goal or something more "sticky." Note that the latest FOMC minutes will also be released today at 2 PM ET.

March CPI is expected to rise 0.3% M/M, slowing from the 0.4% pace in February. Core CPI, which excludes the volatile food and energy categories, is also seen increasing 0.3% M/M from 0.4% in the prior month. On a year-over-year basis, economists, on average, forecast the CPI will increase 3.5%, accelerating from 3.2% in February, while the core CPI is projected to climb 3.7% in March, compared with 3.8% growth in the previous month (both paces remain solidly above the Fed's target).

Higher for longer? Even meeting the consensus would constitute a "hot" report, said Michael Kramer, Investing Group Leader of Mott Capital Management. "A hotter-than-expected number would come as a surprise and not be well received because it would clearly indicate an unexpected uptick in the pace of inflation," he added, with SA analyst Damir Tokic agreeing with the view. "If the core CPI continues to surprise to the upside, which is anything above the required 0.2% M/M core CPI, it would start becoming more likely that we are possibly witnessing a resurgence of inflation - or possibly the second wave of inflation." (23 comments)

Buy the dip?

Nvidia (NVDA) shares have entered correction territory, with companies battling to challenge the semiconductor giant's dominance. Another leg down for the stock on Tuesday means NVDA is now off 12% from its record high seen in March. Turning up the heat in the chip race, Google (GOOGGOOGL) just unveiled its in-house processors and Intel (INTC) introduced its latest AI chip to rival Nvidia's H100. As for the other Magnificent 7 stocks, Apple (AAPL) entered correction territory last month and Tesla (TSLA) is in a bear market, compared to the rest of the group which is trading near their 52-week highs. (3 comments)

Robotaxi ramblings

A busy period for self-driving development continues as General Motors' (GM) Cruise unit resumes testing its robotaxis (with safety drivers) in Phoenix, Arizona. While Cruise plans to expand the effort to other cities - with the goal of eventually resuming driverless operations - it did not provide a timeline for doing so. Note that most WSB subscribers see the robotaxi market as a niche service. Cruise suspended all U.S. operations after an accident in California led to the temporary loss of its license in the state, while the fallout saw the exit of many top executives, including its CEO. (13 comments)

Sino spotlight - Part 2

A day after Janet Yellen left China, Fitch has cut the country's credit outlook to negative from stable, but affirmed its A+ sovereign rating. The decision reflects growing risks to public finances and uncertain economic prospects as Beijing transitions away from property-reliant growth to a more sustainable model. That shift will require sustained fiscal support from the government. Moody's also revised China's credit outlook to negative last December, attributing the move to rising costs to support cash-strapped regional and local governments, as well as state firms.

Today's Markets

In Asia, Japan -0.5%. Hong Kong +1.9%. China -0.7%. India +0.5%.
In Europe, at midday, London +0.6%. Paris +0.5%. Frankfurt +0.8%.
Futures at 7:00, Dow +0.1%. S&P +0.1%. Nasdaq flat. Crude +0.5% to $85.67. Gold +0.2% to $2,367.80. Bitcoin -2.4% to $68,927.
Ten-year Treasury Yield -1 bp to 4.36%.

Today's Economic Calendar

7:00 MBA Mortgage Applications
8:30 Consumer Price Index
8:45 Fed's Bowman Speech
10:00 Wholesale Inventories (Preliminary)
10:30 EIA Petroleum Inventories
12:45 PM Fed's Goolsbee Speech
1:00 PM Results of $39B, 10-Year Note Auction
2:00 PM FOMC Minutes
2:00 PM Treasury Statement

Companies reporting earnings today »

What else is happening...

FAA to probe Boeing (BA) whistleblower's claims about 787 flaws.

Gold adds to record-breaking run ahead of CPI and Fed minutes.

...Costco (COST) may be sitting on gold with new metals business.

Reports of a big profit surge at TikTok parent ByteDance (BDNCE).

Morgan Stanley raises crude oil outlook on rising geopolitical risk.

EIA cuts April coal export forecast after Baltimore bridge collapse.

Microsoft (MSFT) is investing heavily in Japanese data centers.

Taiwan Semiconductor (TSM) revenue surges amid AI chip boom.

Chinese EV stocks gain as double-digit volume growth continues.

Moderna (MRNA) gets a boost from latest cancer vaccine data.

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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