Wednesday, May 12, 2021
CPI Inflation Surprises To The Upside
- The Bureau of Labor Statistics released April data for the Consumer Price Index (CPI) this morning showing headline CPI jumped 0.8% month over month vs. estimates of 0.2%, while core CPI jumped 0.9% month over month vs. estimates of 0.3%.
- Year over year, headline CPI rose 4.2% (highest since 2008) while core CPI came in at 3.0% (highest since 1996).
- We examine today’s data release as well as implications for future inflation in today’s LPL Research blog, available at 12p.m. ET.
U.S. markets head lower for a second straight day on inflation worries after CPI surge
- The Dow Jones Industrial Average, S&P 500 Index, and the Nasdaq Composite are all lower, led down by the Nasdaq.
- European markets are mixed with the Euro Stoxx 50 essentially flat.
- Asian markets closed mostly lower with Japan’s Nikkei down over 2%.
Healthy consolidation in S&P 500 barely dents trend’s strength
- In a strong bull market, sometimes it’s easy to forget that stretches of down days are normal and even healthy.
- Down days naturally turn market participants’ minds to potential risks. There are several stories that are easy to tell—inflation, taxes, valuations, sentiment—but overall macroeconomic fundamentals are still providing solid support for stocks.
- The S&P 500 may continue to grind higher, but even a significantly stronger pullback than what we’ve seen from the last two market sessions could strengthen, rather than weaken, the resiliency of the overall trend.
New Street View Video: What It’s Like To Go On CNBC
LPL Research Chief Market Strategist Ryan Detrick takes us on a behind-the-scenes look at what it is like to be featured on CNBC in the latest LPL Street View.
Technology and the Nasdaq led on a relative basis Tuesday, but still closed lower and are extending those losses in early trading today. Next support for the Nasdaq Composite comes in the range near 12,400, while the S&P 500 has support at 4,118 followed by 4000.
Amazing Earnings Season: LPL Research Reacts
LPL Research raises its year-end S&P 500 Index fair value target range again in the wake of a stunning Q1 2021 earnings season. Learn more in this week’s Weekly Market Commentary.
A Record Breaking Earnings Season
On the LPL Market Signals podcast, Chief Market Strategist Ryan Detrick and Equity Strategist Jeff Buchbinder discuss the incredible earnings season, debate whether we’ve hit a peak in earnings and economic growth, and economic policies.
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