Mild Producer Price Data Follows Consumer Price Shock, Yet Economists Raise Doubts On Rate Cuts: 'Fed Pivot Is Quickly Disappearing'
Portfolio Pulse from Piero Cingari
The Producer Price Index (PPI) for March 2024 increased to 2.1% year-over-year, slightly below expectations, following a consumer price inflation report that exceeded forecasts. The SPDR S&P 500 ETF Trust (SPY) remained flat, while the Invesco QQQ Trust (QQQ) saw a modest rebound. Economists and analysts suggest the mixed PPI data, alongside consecutive months of rising CPI, indicate a reduced likelihood of Federal Reserve rate cuts this year, with any potential adjustments not expected until at least July. The data has led to a reevaluation of the Fed's pivot on interest rates, with future monthly PPI gains expected to be higher.
April 11, 2024 | 4:28 pm
News sentiment analysis
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POSITIVE IMPACT
The Invesco QQQ Trust rebounded by 0.4% after a previous day's loss, reflecting a positive market response to the PPI data, particularly in the technology sector.
QQQ's rebound suggests that the technology sector may be more resilient or optimistic about the impact of inflation data on the Federal Reserve's interest rate decisions, leading to a positive short-term outlook.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
The SPDR S&P 500 ETF Trust remained flat following the PPI report, indicating mixed market reactions to the inflation data and its implications for future interest rates.
The flat performance of SPY suggests that the market had already priced in expectations around inflation and potential Federal Reserve actions, leading to a neutral short-term impact.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70