Stocks End Higher On Better Than Expected CPI, All Eyes On Today's FOMC Announcement

Plus 5 Just-Added Strong Buys Stocks End Higher On Better Than Expected CPI, All Eyes On Today's FOMC Announcement [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks End Higher On Better Than Expected CPI, All Eyes On Today's FOMC Announcement [Stocks End Higher On Better Than Expected CPI, All Eyes On Today's FOMC Announcement]Image: Bigstock Stocks closed higher again yesterday, with the small-cap Russell 2000 and mid-cap S&P 400 leading the way with gains of more than 1% each. Also of note, the S&P 500 and Nasdaq each made new YTD highs. Yesterday's better than expected Consumer Price Index (CPI) report showed retail inflation continuing to moderate. Headline inflation was up 0.1% m/m vs. last month's 0.4% gain and views for 0.2%. On a y/y basis it came in at 4.0% vs. last month's 4.9% pace and the consensus for 4.1%. The core rate (ex-food & energy) was up 0.4% m/m, in line with last month and the consensus. On a y/y basis it came in at 5.3% vs. in line with estimates but down from last month's 5.5% pace, and last year's peak of 6.6%. Today we'll get another look at inflation with the Producer Price Index (PPI), which is wholesale inflation. The expectations are for headline inflation to have actually come down by -0.1% on a m/m basis, while the y/y rate comes in a 1.6% vs. last month's 2.3%. The core rate is expected to increase by 0.2%, while the annual rate is expected to come in at 2.9% vs. last month's 3.2%. That comes out at 8:30 AM ET. But what everyone is really waiting for is this afternoon's FOMC announcement on rates, and Fed Chair, Jerome Powell's customary Press Conference shortly thereafter. At the moment, the expectation is for the Fed to pause on rates. But there's a growing belief that they may raise another 25 basis points at the July meeting. Of course, that all depends on the data we get before then. And if the inflation data continues to beat expectations (goes down more than expected), those beliefs could quickly dissipate. Nonetheless, the odds are currently for a pause this afternoon. But it's anybody's guess what they'll allude to for July and after. And that's what everybody will be waiting for. The announcement comes out at 2:00 PM ET, and the Fed Chair Press Conference starts at 2:30 PM ET. In other news, yesterday's NFIB Small Business Optimism Index increased to 89.4 vs. last month's 89.0 and the consensus for 88.4. In addition to today's PPI report and Fed news, we'll also get MBA Mortgage Applications, and the Atlanta Fed Business Inflation Expectations. Should be a busy day. See you tomorrow, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research Sponsor [Over 5,000 investors already got their piece]( Your chance to cash-in on the white-hot cybersecurity market is running out. 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