DHUnplugged #702: Inflation Nation

Emerging markets breaking out of long consolidation PPI HOT - Market does not care A Meme stock face ripper! PLUS we are now on Spotify and Amazon Music/Podcasts! Click HERE for Show Notes and Links DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar. Love the Show? Then how about a Donation? Follow John C. Dvorak on Twitter Follow Andrew Horowitz on Twitter DONATE - Show 700 Campaign Warm Up - Inflation reports PPI today and CPI tomorrow - Sentiment is dropping - wondering why - Meme stock face ripper - EV days - losses not acceptable - PPI and CPI this week Market Update - Another good week - seems like coming out of downturn - Rates down- 10Y Treas falling over past week - S&P 500 near record - Emerging markets breaking out of long consolidation - PPI HOT - Market does not care Fed talk - Fed's Goolsbee and Kashkari - There has been cross currents in the data. - There has been some bumps in the road on inflation in 2024. - The Fed is in a wait and see mode - Cautious about how restrictive policy is. - More data is needed before they can predict a rate cut. - There is a high bar for another rate hike, but not ruling it out. - Leases trending up is a concerning signal. ----- What does any of that tell us? ------ We need to start a movement to SHUT THE FED UP (STFU) Latest Inflation Readings - The Producer Price index for final demand increased 0.5% month-over-month in April (Briefing.com consensus 0.3%) following a downwardly revised 0.1% decline (from 0.2%) in March. The index for final demand, excluding food and energy, also increased 0.5% month-over-month (Briefing.com consensus 0.2%) following a downwardly revised 0.1% decline (from 0.2%) in March. - On a year-over-year basis, the index for final demand was up 2.2%, marking the largest increase since April 2023, while the index for final demand, excluding food and energy, was up 2.4%, unchanged from March. - The key takeaway from the report is that nearly three quarters of the increase in final demand prices was due to a 0.6% increase in the index for final demand services, something that will detract from the Fed's confidence that inflation is on a sustainable path to its 2% target. Powell speaking AGAIN!!!!!!!!!!!!! - Fed Chairman Jerome Powell says he doesn't think next rate move will be a hike, more likely a hold; time will tell if policy is sufficiently restrictive; PPI reading was quite mixed Getting AI Overload - OpenAI CEO Sam Altman says "not gpt-5, not a search engine, but we’ve been hard at work on some new stuff we think people will love! feels like magic to me"  Sentiment - Consumer sentiment fell sharply in May to the lowest level in six months as Americans cited concerns about stubbornly high inflation and interest rates and fears that unemployment could rise - May Univ. of Michigan Consumer Sentiment - Prelim 67.4 vs 76.5 Briefing.com consensus; April Final was 77.2 Fed Put - Markets melting up since last Powell comments - There is  a new spin on the old "Fed put." The latter rested on an unspoken assurance that the Fed would step in with easier policy to forestall a market meltdown. - The new version doesn't guarantee a rate cut soon, but it has created an unspoken assurance that market participants can trade around the idea that the next monetary policy move is likely to be a rate cut. Meme Stocks - Gamestock was up 80% and  many of the other names moving hard --- Seems like the original Gamestock dude - Roaring Kitty put out a tweet on Monday and the stock went bananas... More Squeeze - Shares of the vaccine maker soared 99% Friday, after the company signed a $1.2 billion licensing agreement with Sanofi that includes commercializing a combined Covid-19 and flu shot. - The move boosts a stock that had plunged about 99% — prior to the deal — from its 2021 peak amid waning demand for its Covid vaccine.