The Buzz on Business for May 14th 2024

In a report issued monthly by the Federal Reserve Bank of New York, Consumer Inflation Expectations ticked up in April for the first time since October of last year. According to these data, consumers expect a 3.3% inflation rate over the next twelve months. For the preceding four months, that rate stood at 3%, a number well above the Fed’s target and way, way too high.

While we at Buzz on Business maintain that inflation is a monetary phenomenon—and the data bear this out—inflation clearly has a psychological component.

If consumers expect prices to increase, they make decisions regarding their finances, such as bringing forward purchases and taking on debt, that tend to exacerbate inflationary pressures.

Consumer expectations are one thing. Hard numbers on prices are entirely another, and today and tomorrow, hard numbers on inflation will be released.

Stock Market Report

Volume finally ticked up on Monday but remains well below average, as stocks finished mixed in advance of the inflation data due out later this morning.

• The Dow Jones Industrials broke an eight-day winning streak and finished off 81 points. That's a loss of two-tenths of 1%, and they closed at 39,432.
• The S&P 500 was basically flat on the session. It was off just a bit more than one point and closed at 5,221.
• The NASDAQ Composite was up three-tenths of 1%, that’s 47 points, and it closed at 16,388.
• The Russell 2000 was also up. It closed at 2062, up two points, or one-tenth of 1%.

Bond Market Report

Interest rates were mixed, mostly just a tad lower on Monday.

• The yield on the 2-year treasury closed at 4.865%. That’s down a bit less than one basis point.
• The 20-year was likewise off one tick, and it closed at 4.730%.

Oil, Gold, and Bitcoin

• Oil got back most of what it lost on Friday. It was up a dollar four and closed at $79.17.
• Gold lost more than it gained on Friday. It was off $24.30. And a troy ounce now changes hands at $2,345.50.
• Bitcoin had a pretty good day. It closed at $63,106.66. That's up $2426.50.

All Eyes on Inflation

A slow news day here at World Headquarters on Monday. Nothing on the earnings calendar. And other than consumer inflation expectations we mentioned earlier, nothing at all on the economic calendar either.

So, all eyes are focused on the inflation numbers due out later this morning and tomorrow.

Today, the Producer Price Index complex rolls out. Inflation at the wholesale level is expected to have increased by 0.3% in April, versus 0.2% last month.

The CPI numbers will be released tomorrow. Expectations are that the consumer price index increased by 0.4% in April, well above—more than double—the Fed’s target. Yikes!! And as we have seen over the last several months, inflation numbers have tended to come in above expectations.

Federal Reserve Board Chairman Jerome Powell also gives a speech later today. And while we expected his speech was written, edited, and focus grouped before the release of these latest inflation data. We will be very interested to see what he has to say.

We will do what we do and have all of it here for you tomorrow on the Buzz.