CPI for the month of February increased at 0.4% vs 0.3% expected and treasury yields are higher. Despite the uptick in inflation, stocks are trading at all-time highs while precious metals face selling pressure.
Good afternoon traders. It’s Chris Chavez with blue line futures and it’s your daily, midday market minute. CPI came in slightly harder than expectations yet stock indices are hitting record highs before we get to it. If you’re watching this video, like and subscribe, if you’re on our website, there’s a link to direct you to YouTube and you can subscribe that way, we’d love for you to follow us, we would love for you to help us build our following. So CPI for the month of February came in at a four tenths increase, versus a three tenths of a percent expected. That puts a year over year number 3.2% versus 3.1%. Now, despite this uptick in inflation, for the month of February, we are actually seeing stock indices hit record highs today. So a very interesting trade is being taken is taking place today, treasury yields interest rates are pushing higher. And despite that stocks are trading higher as well, even though inflation has been a big risk, especially a bit reaccelerating. So I want to break down some of the components inside of inflation could be potentially why stock indices are continuing to push higher food away from home did actually come in softer than expectations. And I think that’s supporting some of the consumer discretionary softness that we would see in a deflationary environment. So one thing that the markets could potentially latch on to owners equivalent rent also declined now at the lowest level seen since July of 2022. So you’re still seeing some inflation and shelter but it’s now at the level July 2022 levels. So I think those are two components that are very interesting inside of CPI could be one reason potentially why the markets are you know, having a bit of a risk on sentiment. Even the Russell 2000 slightly in positive territory. semiconductors are really leading the way higher today and Vidya you know really outperforming a lot of other stocks but specifically lifting the NASDAQ 100 which is the biggest outperform are here today. The Russell 2000 Super micro a big winner also adding to the fuel sing in the Russell 2000 in positive territory as well. Interest rate cut expectations have not really changed even though inflation has come in slightly harder than expectations today, they’re still 75 basis points worth of cuts being priced in to fed fund futures 70% chance of a cut taking place in June at 8% chance of a cut taking place in July. Now with this you know narrative and not much being shifted around. Even though CPI came in higher than expectations, yields are higher. Metals are not you know trading in tandem with stocks today, you’re actually seeing precious metals face a little bit of selling pressure. So more things to pay attention to a 10 year note auction at 12 Central Standard Time. Also 30 year bond auction do tomorrow. Some of these major support and resistance levels. Looking at the s&p three star resistance is going to be 50 to 45 to 50 to 55. If we can break and close above there, I think it definitely adds a little bit more conviction looking at the NASDAQ 18,005 40 to 18,088. Same thing we want to break and close above this range and looking at gold if we can maintain support of 2148 and two tenths to 2150 and a half. That looks pretty good here in the near term despite hotter than expected CPI numbers. If you have any questions reach out to our trade desk we’re here for you. Remember, futures trading involves substantial risk of loss and is not suitable for all investors.