A trader works during the closing hours of the New York Stock Exchange (NYSE) on Wall Street in New York on March 17, 2020.
Johannes Eisler | AFP | Getty Images
This report comes from today’s CNBC Daily Open, our new international markets newsletter. CNBC Daily Open keeps investors updated on everything they need to know, no matter where they are. Like what you see?You can subscribe here.
What you need to know today
Wall Street hits record highs
this S&P 500 Index and Nasdaq Inflation rates rose to a record high after the inflation data came in below expectations.this Dow Jones Industrial Average Investors bet the Fed may cut interest rates, sending stock prices soaring 350 points September. All three major stock indexes closed at record highs. Technology heavyweights, Nvidia, apple and Microsoft, all rose.Benchmark U.S. 10-year Treasury yield Ministry of Finance Two-year notes fell. oil price Also fell.
Inflation eases
April’s consumer price index rises 0.3%, slightly lower than expected, while 12-month inflation rose 3.4%, in line with economists’ forecasts. It was the first time this year that the data did not exceed expectations, raising the possibility that the Federal Reserve will cut interest rates later this year, even though inflation remains above its 2% target.
unsustainable debt
CEO of JPMorgan Chase Jamie Dimon warns America’s growing fiscal deficit is unsustainable and could cause problems in the future if not addressed. “The United States has spent a lot of money. During and after COVID-19, our deficit is now 6%. That’s a big number, but obviously it will drive economic growth,” Dimon told Sky News. According to the U.S. Treasury Department, the federal government has spent $855 billion more than it has taken in so far this year.
Meme Stock rally fails
shares game station and AMC plunges In signs of waning meme craze, each accounted for more than 18%. The craze was reignited on Monday when Roaring Kitten resurfaced on social media. Before Wednesday, GameStop and AMC were up 179% and 135% this week, respectively. Chart Analyst Predictions”short squeeze“It might end badly.
The 12-Second Cryptocurrency Heist
The Justice Department indicted two brothers for allegedly stealing $25 million in cryptocurrency in about 12 seconds, raising questions about “Blockchain integrity“Anton Peraire-Bueno, 24, and James Peraire-Bueno, 28, are brothers studying at MIT. He was arrested Tuesday on wire fraud and money laundering charges.
(PRO) Winners from trade tensions
As the Biden administration ramps up efforts tariff Morgan Stanley analysts single out a handful of U.S. products among $18 billion worth of Chinese imports stock This could benefit from Sino-US trade tensions.
bottom line
For the first time this year, Inflation cools Beats expectations, drives stock market higher record high. Remarkably, it took the S&P 500 only 48 days to achieve this feat, compared with the previous 746 days. This happened despite the terrible conditions in April. Dow Chemical, S&P 500 Index and Nasdaq Each fell more than 4%.
The latest data, including flat retail sales in April, immediately sparked speculation about when the Federal Reserve might cut interest rates.
Current market sentiment reflected in federal funds futures trading currently indicates a 75.3% chance of a rate cut at the September Fed meeting CME Group Fed Watch Tool. That marks an increase from the 44.9% likelihood shown on Tuesday.
However, Meghan Shue, director of investment strategy at Wilmington Trust, predicts Three interest rate cuts This year, it starts in July. Shue believes that excluding lagging components of the consumer price index, such as housing, auto insurance and health insurance, the inflation rate is “below the Fed’s target of 2%.”
“We think this gives the Fed an opportunity to start cutting rates earlier than the market expects,” Shue explained to CNBC’s “Money Movers.” “We think the first rate cut will be in July, and we’ll have three rate cuts this year. That’s a good idea for us. Works well for the more interest rate sensitive small caps, but just in case we’re wrong, we’re also invested in US large caps, which is a bit of a hedge for some.
Despite these expectations, the Fed Chairman Jerome Powell reiterates Patience is required, emphasizing that inflation is falling slower than expected and the central bank will maintain current interest rates for a longer period of time.
Skyler Weinand, chief investment officer of Regan Capital, agrees September interest rate cut It’s possible, but I believe the Fed will likely seek more evidence before making a decision.
Wenand said: “We are still far away from the 2% inflation level that the Fed wants, and the economy is still strong, so we need more soft inflation data to give the Fed a green light to cut interest rates.” “The Fed has not yet Out of the woods.”
— CNBC’s Jeff Cox, Pia Singh, Alex Harring, Lisa Kailai Han, Yun Li, Vicky McKeever, Samantha Subin, Scott Schnipper and Hakyung Kim contributed to this report.
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