5 Things You Need to Know to Start Your Day

Today’s inflation print may give the Fed room to pause, seeds of doubt over Trump are emerging in the Republican Party, and New Yorkers retu [View in browser]( [Bloomberg]( Today’s inflation print may give the Fed room to pause, seeds of doubt over Trump are emerging in the Republican Party, and New Yorkers return to offices. — [Liza Tetley]( Fed pause [Today’s US CPI print may work in favor of Federal Reserve doves,]( according to Bloomberg Economics, which expects to see moderating inflation bolstering the case for a pause in tightening. Falling energy prices in May should help offset upward pressure elsewhere, they said. Excluding food and energy, prices probably rose 0.3% — a deceleration from April’s 0.4% increase, which ought to be enough to keep the FOMC from opting for an 11th-straight increase in its benchmark interest rate on Wednesday. Trump doubts [Donald Trump’s stranglehold on the Republican Party showed signs of weakening as a GOP senator questioned his electability](. Senator John Cornyn of Texas dubbed Trump’s federal charges pertaining to his mishandling classified information “not good,” and criticized him for not trying to widen his appeal beyond loyal ultra-conservatives. More hard-line Republicans, however, have sought to capitalize on the charges against Trump with statements decrying what they saw as unequal justice. Office occupancy [Workers are gradually migrating back to the office in New York, with office occupancy in the city breaking 50%](for the first time since the pandemic. It comes after some of New York’s largest employers from big tech to big law to Wall Street have tightened return-to-office mandates in recent weeks. Remote work’s enduring popularity has cost New York’s economy more than $12 billion a year, according to Bloomberg analysis. Other cities like Washington and San Francisco have yet to break 50%. Tech rises Nasdaq futures are climbing this morning on more positive tech news with Oracle’s earnings beat. Contacts on the tech-heavy gauge are up 0.6% as of 5:12 a.m. in New York, while S&P 500 futures are rising 0.3%. Treasury yields are falling slightly while a measure of the dollar weakens. Spot gold prices and oil are climbing, while iron ore is declining. Coming up… An early data dose this morning, with the May NFIB small business optimism report out at 6:00 a.m. That’s followed by all important CPI data at 8:30 a.m., after which the FOMC will start its two-day meeting at 10:00 a.m. Also at 10:00 a.m., Treasury Secretary Janet Yellen will testify to the House financial services panel. At 11:30 a.m., the US will sell $38 billion 52-week bills and $45 billion 42-day CMBs, and then another $18 billion 30-year bonds at 1:00 p.m. Later, at 3:00 p.m., Donald Trump will appear in federal court in Miami. Also today, NATO's Stoltenberg is meeting with President Biden. In corporate news, it’s Home Depot’s investor day and Elon Musk is due to speak at the Edison Electric Institute Conference at 11:00 a.m. What we’ve been reading Here’s what caught our eye over the past 24 hours: - [Oracle shares jumped to a record high]( after the firm touted growth in cloud computing - [The return of El Niño threatens more economic destruction]( - [China considers stimulus measures to boost its flagging econom](y - [Air rage is becoming rampant among post-pandemic travelers]( - [Pressure’s on the Bank of England after UK wages shot up and unemployment fell]( - Oracle’s founder [Larry Ellison overtakes Bill Gates]( to become the world’s fourth richest person - The[consumer revenge spending trend may be reversing this summer](bbg://news/stories/RW6P2VTP3SHS) And finally, here’s what Joe’s interested in this morning... Hello and Happy CPI Day. Economists are expecting a gain of 0.4% month-over-month for the core number. For the headline number, the rise is expected to be just 0.1%. Now before going any further, this chart here is a nice snapshot of where we're at these days. It shows WTI oil trading near a 52-week low and the S&P 500 trading at a more than 52-week high. Not bad. A very different vibe from last summer. We'll see what today's CPI tells us, but the widespread assumption right now is that the Fed isn't done hiking rates. Consensus is that we'll get a "skip" at this Wednesday's meeting, and then the expectation is that the Fed will resume hiking at the subsequent meeting. Setting aside the inflation data, and whether we're on a path towards a soft landing or not, what's kind of remarkable is how much heat there is in stocks these days. The NASDAQ is up over 28% YTD. The S&P 500 is up over 13%. A few weeks ago it was popular to say that it was just a few megacaps like Microsoft and NVDA and Apple that pulled up the whole market. But the gains are spreading. Since the start of May, ARKK is up nearly 25%. Meanwhile, the S&P homebuilders ETF XHB is at its highest level since January 2022. A thing I keep coming back to is that if you thought strength in housing and tech was a ZIRP phenomenon, then the 2023 should get you to re-examine your views. Speaking of speculative fervor, one of my favorite stocks to watch for literally decades is the fuel cell maker Plug Power. Every time the animal spirits of the markets really kick into a higher gear, people pile into PLUG. For years and year, it's been a great bellwether of speculative froth. That stock is up nearly 39% since the middle of May. So yeah, this market isn't just about megacaps or AI anymore, unless AI will somehow cause fuel cells to thrive in some way I'm not thinking about. As for the action, here's how a Nomura Equity Derivatives strategist put it in a recent note to clients: "That newest shift over the past week now being the classic PM `chase’ behavior, where they start coming for anything that had been previously `left behind’ in the rally, as yet another sign of capitulatory `stop-in’ for funds who simply have not had the positioning `on,’ and have been forced to grab into exposure to play for a `crash-UP.’” Follow Bloomberg's Joe Weisenthal on Twitter @TheStalwart Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. 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