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| |  | | April 10, 2024 | | Alert Dear Leah, The much-anticipated March Consumer Price Index report, which we believed would set the tone for the market's direction for the rest of the month, came in with a thud this morning. Subsequently, we believe now is a great time to buy the dip in one stock we've been eyeing.
But first, let's set the stage a bit.
This morning's report revealed that U.S. core inflation increased by 0.4% in the past month and 3.5% over the past year, exceeding the expected figures of 0.3% and 3.4%, respectively. This rise in inflation dampens the likelihood of an imminent Federal Reserve rate cut. As a result, the probability of a rate reduction in the Fed's June meeting has dropped to 20.6%, with market predictions now leaning toward a cut in September.
In response to the inflation data, the 10-year Treasury yield, a barometer for mortgage and loan rates, surged past 4.5%. The market now anticipates only 50 basis points of easing within the year.
Despite these developments, Wall Street remains bullish on the upcoming earnings season, with forecasts from Deutsche Bank suggesting a robust 10% increase in first-quarter earnings for S&P 500 companies compared to last year.
Adding to the complex economic landscape, the Cleveland Fed Nowcast indicates a resumption of the inflation decline in April, suggesting that the current pressures could be a temporary surge before a combination of strong earnings and a return to lower inflation rates potentially drives the market upward.
Honestly, I'm really not sure what the market is worried about, but I'll take any chance to buy good companies at a discount.
The reality is that the inflation rate has plummeted in April. Shelter costs remain high but are decreasing, and although energy prices are rising, they continue to be at a depressed level.
Everything else? Low and falling.
So, let's get into today's latest buy and get ready to add it to our portfolio. Read the Full Alert |  | | Luke Lango
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