Stock Market Nerd Macro – April 13, 2024
Inflation Data:
- The Consumer Price Index (CPI) rose by 3.5% Y/Y for March vs. 3.4% expected. This compares to 3.2% last month.
- The Core CPI rose by 3.8% Y/Y for March vs. 3.7% expected. This compares to 3.8% last month.
- The CPI rose by 0.4% M/M for March vs. 0.3% expected. This compares to 0.4% last month.
- The Core CPI M/M for March rose by 0.4% vs. 0.3% expected. This compares to 0.4% last month.
- The Producer Price Index (PPI) rose by 0.2% M/M for March vs. 0.3% expected. This compares to 0.6% last month.
- The Core PPI rose by 0.2% M/M for March vs. 0.2% expected. This compares to 0.3% last month.
- The Export Price Index for March was 0.3% M/M as expected.
- The Import Price Index for March was 0.4% M/M vs. 0.3% expected.
- Michigan 1-year and 5-year Inflation Expectations for April both rose M/M and were hotter than expectations.
Consumer & Employment Data:
- Michigan Consumer Sentiment and Expectations both missed expectations.
- Initial Jobless Claims were 211,000 vs. 216,000 expected.
Inflation data continues to be less promising so far in 2024 vs. the latter end of last year. The PPI was certainly a needed cool-to-inline datapoint just like the March PCE was. All three Q1 CPI readings were notably hot and have made me a bit more cautious for the time being. I still expect disinflation to continue playing out in 2024 and I still expect 1-2 rate cuts. I would need more evidence of re-accelerating inflation to change my opinion and don’t see that coming. The GDP sugar high from recovering supply chains will be lapped in the 2nd half of the year, while housing inflation should begin to reflect the encouraging real-time data we’ve seen over the last several months. Red hot auto insurance inflation will also be very short-lived, and that drove the hot CPI this month.
Candidly, I don’t care about when the first cut comes. I care that the next move will be a cut and that we avoid hyperinflation and a severe recession. I still view doing so as the most likely outcome and will continue to absorb all incoming data to maintain or alter that view.
