Coffee With Greta: Inflation Skyrockets in March


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DJIA Futures: +133 (+0.4%)

SPX Futures: +31 (+0.7%)

NASDAQ Futures: +196 (+1.4%)

Good morning friends!

Futures are higher as the latest CPI data shows inflation may be peaking.

Let’s get right to it!

Red HOT Inflation

U.S. inflation pressures skyrocketed in March.

The Bureau of Labor Statistics' Consumer Price Index surged 8.5% year-over-year last month. 

That was hotter than the 8.4% expected and is the highest since December 1981.

The Core CPI, which excludes food and energy prices, jumped 6.5% annually. 

That was the hottest reading since August 1982. 

On a monthly basis, headline inflation rose 1.2% and core inflation rose 0.3%. 

Energy prices led the gains last month as oil and gas prices soared due to Russia’s invasion of Ukraine. 

The CPI shows gas prices jumped 48% year-over-year while fuel oil prices surged 70.1%.

Food prices continued to see strong gains with grocery prices up 10% year-over-year.

The White House blamed Russian President Vladimir Putin for the latest spike in inflation. 

In a briefing Monday, press secretary Jen Psaki warned, “We expect March CPI headline inflation to be extraordinarily elevated due to Putin’s price hike”.

Consumer Inflation Fears Hit Record

U.S. consumers are expecting inflation to remain a major problem. 

The New York Fed’s released its March Survey of Consumer Expectations Monday, which showed Americans expect inflation to still be at 6.6% 1-year from now. 

That’s a record high for the survey which dates back to 2013. 

Consumers’ 3-year inflation expectations came in at 3.7%. 

1-year and 3-year inflation uncertainty also hit a record high at 4.5% and 4.0% respectively. 

Household spending expectations surged to a record 7.7%. 

Treasury Yields Slip After Hot Inflation Reading

U.S. Treasury yields are slipping after the release of the March CPI. 

The 10-year yield is down seven basis points to 2.71% after popping to 2.82% earlier this morning. 

That was the highest yield seen since December 2018. 

Bitcoin Tumbles Below $40,000

Bitcoin is sitting at $40,300 after falling below $40,000 Monday for the first time since March 16. 

The largest cryptocurrency in the world is down 2.2% in the past 24 hours. 

Tech stocks and cryptocurrencies have suffered from traders dumping risk assets as Treasury yields surge.

Crypto trades independently of the stock market but there has been a higher correlation between the two in recent months with the Fed preparing to tighten more aggressively. 

Oil Prices Rise After OPEC Supply Warning

Oil prices are rebounding after a supply warning from OPEC.

West Texas Intermediate crude futures are up 3.9% to $98 per barrel while Brent crude futures are up more than 4% to over $102 per barrel. 

This comes after OPEC said Tuesday it expects a loss of 7 million barrels per day or Russian oil and other exports. 

The group said it would be impossible to replace that supply. 

CarMax Slides on Earnings Miss

CarMax (KMX) shares are down 4.5% ahead of the open after missing fiscal Q4 profit expectations. 

The auto retailer reported earnings of $0.98 per share vs $1.27 expected. 

But revenue of $7.687 billion beat the consensus estimate for $7.499 billion. 

The CEO blamed”declining consumer confidence, the omicron-fueled surge in COVID cases, vehicle affordability, and the lapping of stimulus benefits paid in the prior year period” for the profit miss.

CarMax plans to open 10 new stores in fiscal 2023.

Albertsons Slips Despite Earnings Beat

Albertsons (ACI) shares are down 3% in premarket trade despite beating fiscal Q4 expectations. 

The grocery chain reported earnings of $0.79 per share on $17.384 billion in revenue. 

That topped analysts’ expectations for EPS of $0.75 on $16.773 billion in revenue. 

Identical sales jumped 7.5% year-over-year, crushing expectations for 4.3%. 

Albertsons forecast fiscal 2022 identical sales growth between 2% and 3% and adjusted EPS between $2.70 and $2.85. 

That was better than the consensus estimate for 1.8% growth and EPS of $2.79.

Beyond Meat Expands Distribution

Beyond Meat (BYND) shares are rising 4.1% ahead of the open after announcing it is expanding its meatless chicken tenders distribution. 

The company’s tenders will now be available at 8,000 new grocery, pharmacy, and big-box retail locations. 

Those include select Albertsons, Sprouts, Whole Foods Market, and CVS locations. 

All Kroger locations in the U.S. will carry the meatless chicken tenders by the end of the month.

In Case You Missed It

  • Elon Musk decided not to join Twitter’s (TWTR) board of directors after becoming the company’s largest shareholder. Twitter CEO Parag Agrawal announced that decision in a tweet over the weekend. But he said, “Elon is our biggest shareholder and we will remain open to his input.” Musk holds a 9.4% stake in the social media giant.
  • Shopify (SHOP) shares closed 2.4% higher Monday after announcing plans for a 10:1 stock split. The e-commerce company plans to implement that split after the market closes on June 28. The plan still needs approval from two-thirds of shareholders.


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