The latest readings on the US consumer price index (CPI) offered up mixed messages surrounding the Fed’s next moves on US interest rates.
But another major catalyst looms for the WSt30_m on Friday, as JPMorgan releases its latest quarterly earnings as the unofficial curtain raiser to the US earnings season.
On one hand, the headline March CPI number came in at 5%, slightly lower than the forecasted 5.1% print, but still a notable step down from February’s 6% year-on-year figure.
Similarly, the March month-on-month number (March 2023 vs. February 2023) also posted a 0.1% print that’s just shy of the expected 0.2%.
On the other hand, the core CPI print (excludes more volatile items such as food and energy prices) ticked back up to 5.6%, slightly higher than February’s 5.5% year-on-year number.
This shows that underlying inflation remains stubborn, despite the Fed having already raised rates by 475 basis points over the past 12 months in hopes of vanquishing inflation.
The mixed-messaging within the CPI report served to maintain market bets for a 25-basis point rate hike at the FOMC meeting in early May, with such odds hovering above 70%.
The Wall Street 30, which mirrors the underlying Dow Jones Industrial Average index, quickly gave up immediate gains following the CPI release to end Wednesday’s session lower by 0.11%.
However, at the time of writing, the WSt30_m is paring yesterday’s losses.
This index has also been, in recent sessions, testing a critical resistance level: the 33,776 mark which is also the 61.8% Fibonacci retracement level from 2022’s plummet between January through October.
Banking heavyweights traditionally serve as the curtain raiser for the once-per-quarter US earnings season.
And here are some big names on Wall Street that are due to release their respective earnings in the coming days:
And lest we forget, the earnings coming out of these US banks are set to be framed within the context of last month’s banking turmoil.
Not only did 3 regional banks collapse in the world’s largest economy, but contagion fears reverberated around the world, stoking rumours of a repeat of the 2008/2009 Global Financial Crisis.
Shareholders, prospective investors, and traders are eager to find out just how well these banks weather the store:
Note that Goldman Sachs accounts for about 6.5% of the total weightage of the Dow, while JPMorgan accounts for about 2.5% of the index.
Hence, the market’s collective reaction to the Q1 financial results of these banks, which together account for 9% of the Dow index, is set to have a major influence on WSt30_m’s performance in the days ahead.
Stock markets are finding some relief after the US debt limit deal was approved by the House, with the Senate’s vote now set to be a formality.
1 June 12:05
Nvidia enjoyed a huge surge in its share price after its results were released after the US stock market closed.
25 May 09:00
US tech stocks have been on a seemingly unrelenting uptrend for much of this year. The NQ100_m, which tracks the Nasdaq 100 index, is edging higher even after the Nasdaq 100’s gain of 1.2% yesterday (Wednesday, May 17th) fuelled by optimism that the US can avert a first-ever default.
18 May 13:43
Disney’s shares fell by 4.9% in Wednesday’s post-market session as the company released its latest quarterly earnings after US markets closed yesterday.
11 May 12:56
There's a better website for you
A new exciting website with services that better suit your location has recently launched!
Sign up here to collect your 30% Welcome Bonus.