Ahead of tomorrow’s CPI, traders are eyeing this morning’s Producer Prices for any hints that the disinflation trend will return…or not.The answer is “not!”April Producer Prices rose 0.5% MoM (vs +0.3% exp), with March’s +0.2% MoM revised down to -0.1% MoM. The downward revision did not stop the YoY read rising to 2.2% (from +2.1% in March)…Source: BloombergThis is the highest YoY read since April 2023 and is the fourth hotter than expected headline PPI print…Source: BloombergProducer Prices have been aggressively downwardly revised for 4 of the last 7 months…Source: BloombergServices costs soared, dominating April’s PPI gains with Energy the second most important factor. Food prices actually declined on a MoM basis.Source: BloombergOn a YoY basis, headline PPI’s rise was dominated by Services (rising at their hottest since July 2023). For the first time since Feb 2023, none of the underlying factors were negative on a YoY basis…Source: BloombergAfter last month’s farcical ‘seasonally adjusted’ gasoline price, April saw the PPI Gasoline index rise (with actual prices at the pump) but still has a long way to go…Source: BloombergCore PPI was worse – rising 0.5% MoM (more than double the +0.2% MoM expected) – which pushed the Core PPI YoY up to +2.4%…Source: BloombergAnd finally US PPI Final Demand Less Foods Energy and Trade Services rose by 0.4% MoM and 3.1% YoY (the highest in 12 months).Worse still the pipeline for primary PPI is not good as intermediate demand is starting to accelerate…Source: BloombergSo, no, The Fed does not have inflation under control.Key Events This Week: All […]

US consumer inflation data was surprisingly firm in March, raising the stakes for tomorrow’s April report (Wed., May 15). Another round of disappointing numbers would arguably confirm that the recent disinflation trend is in serious trouble. No one can rule out that possibility, but I’m expecting we’ll see disinflation will return in some degree.In particular, the year-over-year change in core CPI is expected to ease to 3.6% through April, based on the point forecast for CapitalSpectator.com’s  The prediction interval leaves room for an upside surprise, although the odds that core CPI will accelerate are quite low. The worst-case scenario, according to this modeling, is that core CPI’s 1-year trend holds steady.Another factor that suggests that disinflation will continue: the lag effects of monetary policy, which have been relatively hawkish over the past two years. Consider how the year-over-year changes in broad M2 money supply (advanced 12 months) compare with the 1-year change in core CPI. As the chart below suggests, the recent negative comparisons in M2 point to more disinflation ahead.Timing, of course, is open for debate and so the negative 1-year trend in M2 may not be relevant for any given monthly CPI report. What’s more, the M2-CPI chart above raises a warning for the disinflation outlook, namely: time is running out. The net change in the M2 trend is still negative, but the depth of the contraction is fading and looks set to turn positive soon. The implication: monetary policy’s ability to promote a disinflationary bias is fading.Meantime, market […]

By Mike Maharrey, Fed officials and people in the Biden administration insist “we” are making progress in tamping down price inflation. Many market analysts are optimistic enough to believe that the central bank will be able to cut interest rates this fall.But the average American isn’t so sure the Fed is going to win the inflation fight any time soon.According to , people in the U.S. are bracing for generally hot price inflation for at least the next three years. Respondents to the survey expect price inflation as measured by the CPI to still be running at 3.3 percent one year from now. Last month, the expectation was for 3 percent price inflation in a year.Three years from now, Americans expect price inflation to still be running hot at 2.8 percent – still well above the Fed’s mythical 2 percent target.The found similar sentiment, with year-ahead price inflation expectations rising from 3.2 percent to 3.5 percent.In a separate survey by the Cleveland Fed, business leaders expressed similar pessimism, saying they expect CPI to rise to 3.8 percent over the next year. at 3.5 percent. That means most people don’t see the price inflation picture improving much at all over the next 12 months. Americans expect prices to rise across all measured categories, including food, fuel, medical care, and rent. A general rise in prices throughout the economy is . As the central bank creates money out of thin air and incentivizes borrowing, the money supply expands, and an individual dollar buys less. This […]

Image Source:   Alibaba Group Holding Limited (NYSE: ), a leading e-commerce and technology conglomerate, reported its financial results for the  ended March 31, 2024.The company demonstrated moderate growth with revenue reaching RMB 221,874 million ($30,729 million), marking a 7% increase year-over-year. This growth was driven by the company’s China and international commerce businesses, which saw double-digit year-over-year GMV growth, and the accelerated growth of cloud computing revenues related to AI products.Despite the revenue growth, Alibaba’s income from operations decreased by 3% year-over-year to RMB 14,765 million ($2,045 million). The company attributed this decrease to increased investments in its e-commerce businesses and retention incentives for Cainiao employees. Adjusted EBITA also saw a 5% decline, totaling RMB 23,969 million ($3,320 million).Net income attributable to ordinary shareholders was RMB 3,270 million ($453 million), a significant drop from the previous year, largely due to a net loss from investments in publicly traded companies.  Alibaba Group Misses EPS Expectations in Q1 with $1.40 EPSAlibaba’s performance in the March quarter of 2024 was a mixed bag when compared to market expectations. Analysts had projected earnings per share () of RMB 10.27 and revenue of RMB 220.32 billion. The actual revenue of RMB 221,874 million slightly exceeded expectations, showcasing the company’s ability to maintain growth in a competitive market. However, the company’s non-GAAP diluted earnings per ADS came in at RMB 10.14 ($1.40), falling short of the expected EPS.The discrepancy in earnings was primarily due to the company’s increased investments and the significant net loss from its equity […]

ETN Elliott Wave Analysis Trading Lounge Daily Chart,Eaton Corp. PLC, () Daily ChartETN Elliott Wave Technical AnalysisFUNCTION: TrendMODE: ImpulsiveSTRUCTURE: MotivePOSITION: Minute wave {iii}.DIRECTION: Upside in Minuette (v).  DETAILS: Looking for upside in wave {iii}, equality of {iii} vs. {i} stands at 375$, which could be an ideal target. ETN Elliott Wave Analysis Trading Lounge 4Hr Chart,Eaton Corp. PLC, (ETN) 4Hr ChartETN Elliott Wave Technical AnalysisFUNCTION: TrendMODE: ImpulsiveSTRUCTURE: MotivePOSITION: Wave ii of (v).DIRECTION: Upside in wave iii.DETAILS: Looking for a pullback in wave ii to then resume higher. Looking for a clear three wave move in ii, volume seems to suggest the corrective nature of the whole move.The latest Elliott Wave analysis for Eaton Corp. PLC (ETN) highlights a promising scenario for traders and investors, with both the daily and 4-hour charts indicating a continuation of the impulsive trend.* ETN Elliott Wave Technical Analysis – Daily Chart*The daily chart shows ETN’s movement in an impulsive mode, within a motive structure, currently in Minute wave {iii}. The analysis suggests an ongoing upside movement, specifically targeting Minuette (v). A significant target identified is $375, based on the equality of wave {iii} versus wave {i}. This target level represents a potential point of interest for traders looking to capitalize on the continuation of the bullish trend.* ETN Elliott Wave Technical Analysis – 4Hr Chart*Consistent with the daily analysis, the 4-hour chart also supports a bullish outlook. Currently, ETN is in wave ii of Minuette (v), indicating a brief pullback before a likely continuation higher into wave iii. The corrective nature of wave ii is underscored by volume analysis, […]