We finally got the consumer price index we were looking for, with both the headline and key readings for June coming in well below expectations. The CPI strengthened the case for the Fed to start cutting interest rates. It also provided a golf green glow for investors to exit this year’s tech winners and rotate into rate-sensitive stocks. The headline CPI declined 0.1% from May, the first monthly average decline since May 2020. On a year-on-year basis, it rose 3%, the lowest level in more than 3 years. The basic rate, which excludes food and effort costs and is watched more closely by the Fed, rose just 0.1% from May. That’s up 3.3% from a year earlier, the smallest gain since April 2021. Thursday’s data from the government showed a continuation of the decline in both inflation measures. Jim Cramer in his research on CNBC called the CPI information “perfect” as it nears its lowest point in a while. He said the better data pave the way for a rate cut, but they were not so sensitive as to raise concerns about deflation or advise the Fed to rush matters. Certainly, according to the CME FedWatch tool, there was a slight increase in the likelihood of a Fed rate cut following the July meeting. However, the market still placed the best possible odds on the first cut as prices would fall in September, with the next cut appearing in November and December. In other words, we are back in the market expecting three cuts by the end of the year. Later at the June meeting, the Fed was planning only one reduction this year. In fact, we will have to see what the data tells us in the coming months as to where central bankers really stand. Buyers will be looking for additional clues on Friday morning when the June Producer Price Index will be discounted. PPI is a measure of wholesale inflation. All this Fed talk boosted a number of our rate-sensitive stocks, including Sun NextTracker, toolmaker Stanley Dimm & Decker and electronics store Easiest Purchase. During the club’s morning meeting on Thursday, Jim said participants need to keep in mind that we have a diverse portfolio for days like this. Not every book can proceed immediately; Nor should they do so. It’s surprising that our tech stocks are getting killed on Thursdays. That’s why, as Jim explained, at the end of this cycle we introduced some stocks that could benefit if interest rates fall. As we partake in the fun of Fed guessing, Thursday’s client inflation record best clears the way for profits season and allows impact and control statements to force book pace. Price may be foremost on buyers’ minds. Jim said he believed the Fed should stick to its guns and cut only once before the end of the year because companies were resistant to lowering their prices; Identify Costco in addition to Walmart and Membership. Jim noted how PepsiCo’s reluctance to reduce costs resulted in a mixed quarterly impact and a decline in full-year earnings. This is reflected in the CPI for food and beverages, which saw month-on-month increases of 0.1% in May and 0.2% in June, the same as April. We are also watching safe-haven prices like a hawk because they have been a sticky source of inflation that represents a huge, unavoidable cost to American consumers. On a monthly basis, Safe Haven declined 0.2% in June, which is not surprising as its method prices are still rising, but considering the back-to-back 0.4% increase in April and May Keeping welcome news. June safe haven prices are 5.2% higher year-to-date, which was a continuation of the downtrend that started in March 2023. Base Form Many buyers would have expected a rip-off in the book market rally on Thursday’s CPI information. – The Closest, This is exactly the kind of record we were hoping for. Bond surrenders were also low, which tends to support stocks, especially technology stocks. On the other hand, the desire to make a quick buck and buy some cheaply priced beneficiaries used to be very surprising. The Nasdaq, which was immediately coming off six record highs, fell about 2% in the consultation. .IXIC YTD Mountain Nasdaq YTD Month We are seeing a cycle of names that could evolve in any value order for those who are more sensitive to borrowing prices and the financial system, across 11 S&P 500 sectors Seven have been included. Yet overhead, real assets are best primed on Thursday. There have been more winners than losers in consulting, although the data age and the broader dimension of conversation products and services, which account for more than 40% of the S&P 500 index composite, are keeping the energy unleashed elsewhere. . (See here for a full list of the shares in Jim Cramer’s charitable agreement.) As a CNBC subscriber investing with Jim Cramer, you’ll receive an industry alert before Jim makes any trades. Jim waits to the nearest 45 minutes to send industry alerts before purchasing or promoting a book in his charity contract portfolio. If Jim discusses some book on CNBC TV, he waits until 72 hours after the Industry Alert is issued before acting on it. The above Investment Club information is subject to our disclaimer as well as our terms and conditions and privacy policy. No fiduciary obligation or duty exists, or is created, by virtue of your receipt of any information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
An Aldi grocery store in Alhambra, California, US, on Thursday, June 27, 2024.
Eric Thayer | Bloomberg | getty photographs
We were finally given the consumer price index we were looking for, with both the headline and key readings for June coming in well below expectations. The CPI strengthened the case for the Fed to start cutting interest rates. It also provided a golf green glow for investors to exit this year’s tech winners and rotate into rate-sensitive stocks.
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