Coffee With Greta: Stocks Jump On Cool CPI

DJIA Futures: +225 (+0.7%)

SPX Futures: +34 (+0.8%)

NASDAQ Futures: +135 (+1.0%)

Good morning friends!

Futures are jumping after a better-than-expected March CPI release.

Let’s get right to it!

March CPI Cooler Than Expected

Inflation pressures continued to cool in March.

The Bureau of Labor Statistics’ consumer price index rose 0.1% monthly and 5% year over year.

That was better than expectations for a 0.2% monthly and 5.1% annual gain.

Excluding food and energy, the core CPI rose 0.4% monthly and 5.6% annually, in line with expectations.

Energy prices continued to decline on both a monthly and annual basis.

Gas dropped 4.6% monthly and 17.4% annually while oil prices fell 4.0% monthly and 14.2% year over year.

Grocery prices also fell 0.3% monthly but were up 8.4% annually.

This data is good news for the Fed’s plans to pause rate hikes soon.

CME Group’s FedWatch Tool shows just over 69% of traders anticipating a 25 basis point hike at the May 3 meeting.

The Fed will also release the minutes of its February meeting at 2:00 p.m. ET today.

That readout will give the market more insight into the FOMC’s discussion around when it will be appropriate to pause rate hikes.

Triton International (TRTN) shares are surging 30.6% ahead of the open after announcing a takeover deal.

The company will be acquired by Brookfield Infrastructure Partners (BIP).

The deal is a take-private acquisition that values Triton’s equity at more than $4 billion, with an enterprise value of $13.3 billion.

Triton shareholders will receive $85 per share in cash and stock.

BIP shares are also up 0.9% in premarket trade.

Mortgage demand jumped last week as rates dropped to a two-month low.

The Mortgage Bankers Association reported purchase applications rose 8% weekly and were down 31% year over year.

Refinance applications were flat weekly and 57% lower annually.

The average 30-year fixed contract rate decreased to 6.30% from 6.40%, the lowest level in two months.

Optimism among small business owners edged lower in March but still came in higher than expectations. The National Federation of Independent Business’s Optimism index dipped to 90.1 last month from 90.9 in February. That was better than economists’ expectations for 89. Owners expressed concerns about the short-term future with the number of those who expect real sales to be higher in the next six months dropping sharply.
The International Monetary Fund slashed its global growth forecast on Tuesday. The group now expects global GDP growth to be around 3% five years from now. That’s the lowest forecast since 1990. The IMF’s World Economic Outlook report said, “The world economy is not currently expected to return over the medium term to the rates of growth that prevailed before the pandemic.” The group expects 2.8% growth this year and 3% in 2024. The U.S. economy is expected to expand 1.6% this year.