\u00a0<\/p>\n
US April CPI was up 0.3% from March on<\/strong> a yearly basis, up 3.4%, in line with expectations<\/strong> \u00a0<\/p>\n Overnight Wall Street enjoyed a rate relief bonanza, with US traders reacting positively after the decent CPI release.<\/p>\n The highlight for everyone, once the dust had settled: The core US CPI (ex volatile food & energy segments) lifted by just 0.3% in April. Annual core inflation slid from 3.8% to 3.6% (expected: 3.6%).<\/p>\n That is the slowest pace of inflation growth for the Fed\u2019s fav measure in three years, circa April 2021.<\/p>\n Via WSJ<\/p>\n Wall St clocked fresh hit all\u2011time highs on Wednesday in New York as bond yields fell after the inflation slowdown reinforced the September betting.<\/p>\n Via CBA<\/em><\/p>\n The Nasdaq led gains and futures tied to the major US indices have continued to rallying the general feeling being the Federal Reserve will start cutting interest rates in September.<\/p>\n The Dow Jones added 0.9%, the S&P 500 index, 1.2% and the Nasdaq added 231 points or 1.4%.<\/p>\n All three indexes closed at record highs.<\/p>\n European stocks also climbed to new landmark highs overnight, with the Stoxx\u00a0 notching a record high after the positive inflation print in the US. The continent\u2011wide FTSE EuroFirst 300 index rose 0.6%.<\/p>\n In London, the UK FTSE 100 index gained 0.2%, because England.<\/p>\n The US 10\u2011year Treasury yield fell 10 points to 4.34% and the US 2\u2011year Treasury yield dipped 9 points to 4.73%.<\/p>\n \u00a0<\/p>\n In response to this morning\u2019s April inflation read, GS says \u201cwe lowered our Q2 GDP tracking estimate by 0.4pp to +3.0%\u201d.<\/p>\n Goldman Sachs is also tracking the Fed\u2019s preferred measure \u2013 the Core CPI Inflation \u2013 which GS says slowed \u201ctwo tenths to 3.6%\u201d.<\/p>\n Core PCE is still tracking at 25bp, 2.77% Y-o-Y:<\/p>\n Via GS<\/p>\n \u201cWe continue to expect the Fed to cut the funds rate by 25bps in July and proceed with cuts at a quarterly pace thereafter.\u201d<\/p>\n \u00a0<\/p>\n Morgan Stanley says US inflation continues to be stubborn, with a surprising upswing in the price of goods and services in the first few months of 2024.<\/p>\n \u201cHowever, despite the first-quarter re-acceleration in inflation, price increases should start to slow down as the second half of the year begins, clearing the path for rate cuts.\u201d<\/p>\n \u201cThe Fed will need to feel confident that there won\u2019t be any inflation surprises before it makes its first move, likely making June or July too early to begin the trim cycle. Morgan Stanley Research expects three cuts this year, of 25 basis points each, starting in September,\u201d MS notes.<\/p>\n \u201cThe data over the summer should start to give the Fed more confidence to begin whittling rates starting at the September Federal Open Market Committee meeting.\u201d<\/p>\n Fed Chair J Powell reckons a \u201cmaterial weakening in the labor market\u201d would be a reason to trim rates, and Morgan Stanley believes the US jobless rate this year will lift more than J expects \u2013 ending at 4.2%.<\/p>\n \u201cThe coming jobs data should support our view for a September start to rate cuts, with two additional cuts in November and December.\u201d<\/p>\n \u00a0<\/p>\n Timing is everything in fast food.<\/p>\n McDonald\u2019s confirms $5 value meals to lure back low-income customers after price hikes https:\/\/t.co\/bFGPqunN8o<\/a> pic.twitter.com\/HdS7K7RhBE<\/a><\/p>\n \u2014 New York Post (@nypost) May 15, 2024<\/a><\/p>\n\n Which is why the gurus of the brief burger has announced it\u2019ll start flogging $US5 meals in the States next month.<\/p>\n Subsidised by Coca-Cola which will pour in $US4.6m to back the play, and inspired by the US Fed\u2019s fight v sticky inflation, the burger maker\u2019s US stores will start moving x4 items \u2014 McDouble or McChicken, small fries, small soft drink and a 4 x Chicken McNuggys \u2014 for $US5 kicking off end June.<\/p>\n As per the giant\u2019s quarterly report, Maccas\u00a0 says it\u2019s lost the lead on affordability in a few US markets, and what\u2019s the point if that\u2019s the case.<\/p>\n US franchisees had returned to pre-pandemic levels of profitability in their restaurants, and could afford to put some of their profits into value offerings, Maccas says.<\/p>\n \u00a0<\/p>\n Josh Jamner investment strategy analyst at ClearBridge Investments says the in-line CPI print should \u201cassuage near-term fears\u201d that inflation has been re-accelerating after string of hotter prints in the first quarter.<\/p>\n \u201cWhile the Fed will want to see further data showing that inflation has resumed its drift lower before gaining confidence that they can lower interest rates, today\u2019s print should begin to shift the narrative back towards \u2018when\u2019 the Fed will cut in 2024 rather than \u2018if\u2019 they will cut.<\/p>\n \u201cThe combination of an in-line CPI and retail sales that missed expectations largely due to revisions lower for March\u2019s very strong numbers is rather market-friendly, with the disinflationary process looking to reassert itself while the consumer shows muted but positive spending growth.<\/p>\n \u201cSimply put, today\u2019s data looks like the soft landing is continuing to play out, which should help provide some stability for equity markets that have seen a fair bit of volatility over the past month as fears of a more inflationary \u2018no-landing\u2019 took hold.\u201d<\/p>\n \u00a0<\/p>\n <\/span><\/p>\n The post Maccas, everyone goes nuts as US Fed\u2019s fav inflation measure hits 3-year low<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"
\nCore inflation at 3.6%, was lowest read (minus volatiles) in about three years<\/strong>
\nAll three US majors closed at record highs<\/strong><\/p>\nSeptember? We say July: Goldman Sachs<\/h2>\n
September cuts: Morgan Stanley<\/h2>\n
McDonalds vs McInflation<\/h2>\n
When<\/em> not if<\/em>: Clearbridge Investments<\/h2>\n