The DC Today -Thursday April 13, 2023
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 13 April 2023
⏱️ 10 minutes
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Summary
Today's Post - https://bahnsen.co/43GLAdk
The markets went into big-time rally mode today and, of course, had already rallied a lot from mid-March levels. The CPI number was quite disinflationary yesterday, as Trevor walked you through in the DC Today, and we saw the disinflationary report in CPI yesterday and now further disinflation in PPI today (producer prices). Headline PPI was down -0.5% on the month when no change was estimated. The core PPI number year-over-year is now +3.4%, down more than 50% from its peak level a year ago. It had been +4.8% YOY just one month ago. But the Headline PPI is now up just +2.7% from a year ago, a massive drop and substantial wholesale disinflation that screams for …
A rate hike??? Dear Lord.
March 2022 headline PPI: +11.7%
March 2023 headline PPI: +2.7%
Okay. Don’t get me started. But did the market rally today because it is now even more obvious that the Fed should not be hiking anymore? Well, if so, the Fed Funds Futures aren’t showing it (still 66% implied odds of a quarter-point rate hike). Do markets rally because of what the Fed ought to do or only what the market believes it will do? The former is unlikely last time I checked. Yet markets today clearly said some form of “risk on,” and the reality is that the Fed either gets it or they don’t. The end is near. At least for this rate hike cycle. Credit is contracting. And both stocks and bonds seem to be seeing some form of easier path ahead.
Listen or watch today’s comments and check out the Ask David below for the pivotal question about the dollar everyone is asking.
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. |
| 0:14.1 | Well, hello, welcome to the DC Today Thursday edition, last DC today of the week and a big big rally day the Dow up |
| 0:23.2 | 383 points well over 1% the S&P up about 1.3 the NASDAQ up almost 2%. |
| 0:31.5 | So while Dividendon Cafe tomorrow will not get into everything happening this week in the market, |
| 0:37.8 | we'll close out at least the Thursday with a D.C. today focused on a few things happening |
| 0:43.8 | in the economy in the market. And, you know, it's our favorite topic. This issue with the Fed |
| 0:50.3 | and their insistence on tightening credit, tightening financial conditions, while inflation |
| 0:56.8 | is dropping like a rock. |
| 1:00.2 | And yesterday, as my partner Trevor Cummings discussed and he shared some things that I |
| 1:05.8 | had written and some other commentary he provided, that was very useful at evaluating |
| 1:10.8 | with the CPI data said yesterday. |
| 1:12.7 | But today we had the PPI. |
| 1:14.3 | And I just wanted to do a quick refresher. |
| 1:16.5 | CPI is the consumer price index. |
| 1:19.1 | It's reflecting what people pay is sort of a final price, the consumer price. |
| 1:24.6 | And it could be food and energy. |
| 1:26.6 | It could be a whole lot of other services and products and goods. But the producer price. And it could be food and energy. It could be a whole lot of other services and |
| 1:28.5 | products and goods. But the producer prices refers to kind of inputs or wholesale prices, if you |
| 1:35.1 | will. Both things obviously refer to the price level and the economy. And candidly, it's kind of |
| 1:42.2 | difficult for consumer prices to be going higher when producer prices aren't because you would think in a perfect world that what is happening up or down and the rate at which it's happening with wholesale prices is feeding into final prices paid. |
| 1:58.1 | So you had rather significant disinflation evidence today in the PPI number, down 0.5% on the |
| 2:08.5 | month, but this is the data point I want to focus on, on headline PPI, which includes food |
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