The DC Today - Thursday, April 11, 2024
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 11 April 2024
⏱️ 9 minutes
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Summary
Today's Post - https://bahnsen.co/3JfyXwQ
A modestly positive day in markets overall today on some better-than-expected PPI numbers following yesterday’s selloff on CPI. So what one-day taketh, another giveth back (well, not quite). The Producer Price Index numbers showed a gain of just .2% for the month on headline when .3% was expected, and the Core PPI only gained .1% for the month. The takeaway is PPI is just not confirming a reacceleration in inflation on the wholesale side, which is a positive.
We unpacked yesterday’s CPI numbers pretty well, I thought, but I am sharing this chart from our friends at Strategas with you below to show you where rate expectations have now moved since. My point here is that while they have moved meaningfully higher, I do believe this to be a good thing, contrary to what some may say. The economy, employment, and the markets have all digested these higher rate expectations and it’s simply far healthier for markets to focus and trade on the actual fundamentals of the economy and earnings versus solely on the hopes of looser monetary policy. Shown below, we came into the year expecting Fed funds at 3.5% by Christmas and have now priced in just two rate cuts and ending this year closer to 4.75%. The bar of Fed expectations has been reset to a level high enough that it is now more supportive for markets than the opposite at this point.
Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com
Transcript
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| 0:00.0 | Welcome to the DC Today, your daily market synopsis of the Dividing Cafe, brought to you every Monday through Thursday to bring you up-to-date information and perspective on financial markets. |
| 0:14.3 | Welcome to DC today. It is Thursday, April the 11th. And it's great to be with you here again today. |
| 0:23.7 | And what a difference a day makes. |
| 0:26.0 | Although markets didn't move a whole lot today, the Dow actually closed down a point |
| 0:30.3 | or two, basically unchanged on the day. |
| 0:32.9 | But the S&P and the NASDAQ were both higher. |
| 0:35.2 | The SMP was up 0.8, roughly 0.75, sorry. |
| 0:38.6 | And the NASDAQ was up about 1.6% on the day. |
| 0:42.5 | So I'll call it modestly positive on the day following yesterday, selloff. |
| 0:46.7 | And we got some better than expected PPI producer price index numbers today that were a little bit better. |
| 0:53.1 | So yesterday, CPI disappointed by one-tenth |
| 0:56.0 | and markets kind of did what they did. Today, PPI, which is an input wholesale measurement of |
| 1:02.7 | inflation, rose at 0.2% when 0.3% was expected. So it was a 10th better, at least on headline. |
| 1:10.6 | Poor was only 0.1% for the month. |
| 1:13.3 | So both good numbers. I mean, my takeaway with it, and let me go back, my, my inside of those |
| 1:19.1 | numbers, the goods component deflated slightly and the services component was a 0.3% for the month, which is the second month in a row, |
| 1:30.4 | but it's down from 0.6 in January. |
| 1:32.4 | So what are all those decimal points to decimals mean? |
| 1:35.9 | Basically, the consumer side yesterday showed inflation a little higher than expected. |
| 1:40.7 | We talked about that, I think, pretty well. |
| 1:42.3 | But the producer side today, the input side didn't confirm it or reaffirm, I guess I should say, those numbers. So markets |
| 1:51.7 | felt a little better today, although interest rates did not change today. So we had a big run |
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