What the Latest Inflation Numbers Mean for Investors

Last week's inflation data surprised a lot of folks... On Wednesday, the U.S. Bureau of Labor Statistics released its Consumer Price Index ("CPI") report for March. [Chaikin PowerFeed]( What the Latest Inflation Numbers Mean for Investors By Marc Chaikin, founder, Chaikin Analytics Last week's inflation data surprised a lot of folks... On Wednesday, the U.S. Bureau of Labor Statistics released its Consumer Price Index ("CPI") report for March. In short, the numbers came in above expectations. So-called "headline" inflation was up 3.5% year over year. And "core" inflation (which ignores food and energy costs) showed that prices rose 3.8% compared with the same period a year ago. This "hotter than expected" inflation data triggered a sell-off in stocks and bonds. The S&P 500 Index fell nearly 1% on Wednesday. Meanwhile, the small-cap Russell 2000 Index plunged 2.5%. And sinking bond prices sent yields to their highest levels since November. The reason for the weakness is simple... "Sticky" inflation makes it less likely that the Federal Reserve will cut interest rates anytime soon. And since lower rates are positive for stock prices, it creates a short-term negative as investors adjust their expectations. I know this kind of volatility can be scary. But regular Chaikin PowerFeed readers likely weren't surprised by the sell-off... Recommended Links: [100X Potential Recommendation Goes Live at 5 p.m. Eastern Time Tomorrow]( The man who has booked more 1,000% gains than anyone else at Stansberry Research just met with a former Nvidia engineer. He pointed him to a tiny investment that could make you 100 times your money if you get in now. "Like buying Nvidia for pennies," he says. [He's posting the ticker tomorrow at 5 p.m. Eastern time](. [BREAKING: A Global GOLD LOCKDOWN is Now Underway...]( All over the world, vaults are being emptied out by financial insiders. And soon, you may not be able to purchase gold – at ANY PRICE... Period. Forty-year market veteran and former Goldman Sachs Vice President, Dr. David Eifrig, reveals what is happening behind the scenes in the gold market, and [what you must do immediately to prepare](. As I warned [last week](... Negative surprises in economic data releases can trigger even more volatility in the short term. Well, Thursday's Producer Price Index ("PPI") release was in line with expectations. But CPI numbers were higher than expected. So let's take a quick look at the CPI numbers to see if there's anything investors should be worried about.. [Chaikin PowerFeed] I've highlighted the numbers in the "services" category because they're the ones that came in above expectations. Everyone knew gasoline prices would be up sharply. And inflation is relatively modest for things like food, cars, and clothes. As you can see in the table above, services are where we're seeing particularly stubborn inflation. But while the rising prices are frustrating for consumers, they're also a sign of a strong economy. Most services costs go directly into the pockets of companies and their employees. That means higher earnings (for companies/stocks) and higher wages. In other words, the data shows the U.S. economy is in great shape. A lot of folks are complaining about inflation. But they're still spending money. So don't be distracted by the "Fed chatter." The media loves to obsess over every detail of the Fed's plans for interest rates... But that's not how investors make money in the stock market. As I also said last week... Rising earnings and expectations drive stock prices higher – not interest-rate cuts. And if it takes longer than expected for inflation to hit the Fed's 2% target, that's OK. Those higher prices will translate into earnings growth for companies in the stock market. So I'm still "bullish" on stocks for 2024. And I encourage you to stay "bullish" as well. Good investing, Marc Chaikin Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 -1.2% 10 18 2 S&P 500 -1.38% 147 282 69 Nasdaq -1.59% 25 63 12 Small Caps -1.77% 362 1109 432 Bonds +0.53% — According to the Chaikin Power Bar, Large Cap stocks are more Bullish than Small Cap stocks. Major indexes are mixed. * * * * Sector Tracker Sector movement over the last 5 days Information Technology -0.5% Discretionary -0.97% Staples -1.28% Communication -1.44% Utilities -1.47% Energy -1.99% Industrials -2.2% Real Estate -2.97% Health Care -2.99% Materials -3.07% Financial -3.58% * * * * Industry Focus Oil & Gas Exploration & Production Services 15 31 6 Over the past 6 months, the Oil & Gas Exploration & Production subsector (XOP) has underperformed the S&P 500 by -9.22%. However, its Power Bar ratio, which measures future potential, is Strong, with more Bullish than Bearish stocks. It is currently ranked #9 of 21 subsectors and has moved up 4 slots over the past week. Top Stocks [rating] PSX Phillips 66 [rating] GPOR Gulfport Energy Corp [rating] MPC Marathon Petroleum C * * * * Top Movers Gainers [rating] GL +20.17% [rating] STT +2.53% [rating] KIM +0.89% [rating] AAPL +0.86% [rating] FAST +0.82% Losers [rating] ANET -8.55% [rating] ZTS -7.84% [rating] FMC -7.78% [rating] VFC -7.77% [rating] JPM -6.47% * * * * Earnings Report Reporting Today Rating Before Open After Close GS, MTB, SCHW No earnings reporting today. Earnings Surprises [rating] C Citigroup Inc. Q1 $1.75 Beat by $0.48 [rating] PGR The Progressive Corporation Q1 $3.76 Beat by $0.54 [rating] WFC Wells Fargo & Company Q1 $1.20 Beat by $0.11 [rating] JPM JPMorgan Chase & Co. Q1 $4.44 Beat by $0.31 [rating] BLK BlackRock, Inc. Q1 $9.81 Beat by $0.44 * * * * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, [click here](. 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