The widely expected U.S. Consumer Price Index was released last week and has shown a significant slowdown since it peaked at 9% in June 2022. The headline annual figure came in at 5.0%, down from 6.0% in February and below expectations of 5.2%. While the annual core inflation, which excludes the volatile food and energy items, ticked higher to 5.6%, as expected.
Headline inflation in the U.S. eased last month to its lowest level in nearly two years, but the uptick in core prices could keep pressure on the Federal Reserve to go ahead with another 25-basis point interest rate increase at their upcoming meeting on the 3rd of May.
Inflation rates have been decelerating and the Fed’s aggressive interest rate hikes could soon pause. According to some economists, inflation around 5% is no longer considered an emergency issue, which means the Federal Reserve could feel less pressed to keep on with its aggressive interest rate hikes.
The Federal Reserve minutes were also released last week. The main takeaway from the minutes was that the central bank anticipates a mild recession in late 2023. Since November 2022, economists at the Federal Reserve have predicted subdued growth and after the banking crisis in March, that forecast was revised to a recession.
The latest inflation data is one of the most important economic releases ahead of the Fed’s next policy meeting. While there is some progress in the fight against high prices, inflation remains still high, and the labour market is still strong.
Fed officials do not yet appear to have reached a consensus over whether another 25-basis point rate rise will be needed before the central bank pauses. Last month most officials supported an additional increase, which would push the federal funds rate above 5% and forecast no cuts until 2024.
That is in sharp contrast with the current futures market pricing, which suggests the Fed will deliver one last rate hike in May before reversing course and cutting the federal funds rate towards the end of the year.
Earnings season in the U.S. picks up steam with the major benchmark indices trading sideways as investors assess a slew of earnings reports and their implications for the economy.
So far earnings season has proven resilient so far against expectations for declining profits. While results are likely to be largely in-line with expectations, the focus will be on forward guidance and tighter credit conditions.
FactSet data forecasts that Q1 earnings of the S&P 500 will decline by 6.5%, year-on-year, which would mark the second quarterly earnings decline in a row and the largest since the second quarter of 2020.
The rally from the March lows is losing momentum over the past few days weighed down by mixed quarterly results. Investors are searching for direction amid choppy economic data, high interest rates, expectations of upcoming recession and volatility in the market.
While at this juncture in time there is no sign the rally from the March low is reversing direction, the index is approaching its previous resistance of 4,200 and overbought momentum levels, which means it might be challenging to edge higher from here in the short-term.
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Violeta è entrata a far parte di Leverage Shares nel settembre 2022. È responsabile dello svolgimento di analisi tecniche e ricerche macroeconomiche ed azionarie, fornendo pregiate informazioni per aiutare a definire le strategie di investimento per i clienti.
Prima di cominciare con LS, Violeta ha lavorato presso diverse società di investimento di alto profilo in Australia, come Tollhurst e Morgans Financial, dove ha trascorso gli ultimi 12 anni della sua carriera.
Violeta è un tecnico di mercato certificato dall’Australian Technical Analysts Association e ha conseguito un diploma post-laurea in finanza applicata e investimenti presso Kaplan Professional (FINSIA), Australia, dove è stata docente per diversi anni.
Julian è entrato a far parte di Leverage Shares nel 2018 come parte della prima espansione della società in Europa orientale. È responsabile della progettazione di strategie di marketing e della promozione della notorietà del marchio.
Oktay è entrato a far parte di Leverage Shares alla fine del 2019. È responsabile della crescita aziendale, mantenendo relazioni chiave e sviluppando attività di vendita nei mercati di lingua inglese.
È entrato in LS da UniCredit, dove è stato responsabile delle relazioni aziendali per le multinazionali. La sua precedente esperienza è in finanza aziendale e amministrazione di fondi in società come IBM Bulgaria e DeGiro / FundShare.
Oktay ha conseguito una laurea in Finanza e contabilità ed un certificato post-laurea in Imprenditoria presso il Babson College. Ha ottenuto anche la certificazione CFA.