Soft CPI Sparks Run To Record Highs For US Stocks; Bonds, Bullion, & Bitcoin All Bid.
US Consumer Prices Have Risen Every Month Since 'Bidenomics' Began, Up 19.5% To Record High!
Tl;dr - Nothing good - all bad... and new record highs for US stocks.
SuperCore CPI hotter than expected (but headline and core CPI in-line/small miss), Retail sales way uglier than expected (but gas station spending surged), homebuilder sentiment slumped, and Empire Fed Manufacturing ugly...
Source: Bloomberg
So after a fourth straight month of hotter than expected PPI, analysts' expectations for CPI were tightly ranged around 0.3-0.4% MoM and printed +0.3% MoM (slightly below the 0.4% expected). The YoY headline CPI fell to +3.4% as expected from +3.5% prior.
And the main stream media won't tell you this - that consumer prices have not fallen in a single month since President Biden's term began (July 2022 was the closest with 'unchanged'), which leaves overall prices up over 19.5% since Bidenomics was unleashed (compares with +8% during Trump's term). And prices have never been more expensive.
Source: Bloomberg
That is an average of 5.5% per annum (more than triple the 1.9% average per annum rise in price during President Trump's term).
The US market doesn't care about growth - it's high on rate-cut expectations especially after the 'cool' CPI (two cuts fully priced in for 2024 and three more cuts - at least - in 2025).
Source: Bloomberg
And that lifted stonks across the board with Nasdaq leading the way to new record highs (Dow & S&P first new record close since March)
Source: Market Watch
Meanwhile the VIX crashed down to 12 handle, yields across the board were down and the USD was down (Aussie up nearly to USD67c)
Gold, Bitcoin all surged with Bitcoin having its best day since MAR2023!!
Happy Thursday!
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Andy is the founder of ANDIKA Pty Ltd, a licensed securities & derivatives dealer. He's the author of fiction and non-fiction books and has been a University lecturer on risk and investment.
