Markets are moving sharply higher on the heels of the latest Consumer Price Index, which came in at the lower range of expectations one day after the Producer Price Index came in hot.
CPI for April year over year was 3.4% versus expectations of 3.4% and 3.5% previously. Excluding more volatile food and energy prices was at 3.6% versus expectations of 3.6% and a previous number of 3.8%.
Retail sales numbers, however, were not so great, coming in at 0.0% versus expectations of 0.4% and a previous reading of 0.7%.
Despite the poor retail sales data, stocks are moving sharply higher, and speculative stocks will run higher with the Nasdaq 100 (QQQ) already at all-time highs, as is the S&P 500 (SPY). The Dow (DIA) is also near all-time highs.
This news will embolden the markets as far as getting rate cuts sooner rather than later… The chances for a 0.25% cut at the July FOMC meeting is up to 34.1%, and better than 50% for the September meeting.
I would, however, be very careful today because with the market surging higher, pro traders are going to unload a lot of positions right after the open.
I’ll cover all that, my daily hitlist of longs and shorts and more in this morning’s “Premarket Must Watch” video!
Roger Scott
Roger Scott Trading
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