Coffee With Greta: Inflation Rally

Register now for today's free pro trader Q&A on LinkedIn!

DJIA Futures: +195 (+0.6%)

SPX Futures: +32 (+0.7%)

NASDAQ Futures: +141 (+0.9%)

Good morning friends!

Futures are popping higher after the release of positive new inflation data.

Let’s get right to it!

Inflation Cooler Than Expected

U.S. inflation pressures were cooler than expected in June. 

The Bureau of Labor Statistics’ consumer price index rose 0.2% monthly and 3% year over year. 

That was better than expectations for +0.3% monthly and +3.1% annually. 

It was the lowest annual rate since March 2021.

Grocery prices were up 4.7% from a year ago while gas prices were down 26.5%. 

The core CPI, which excludes food and energy prices, rose 0.2% monthly and 4.8% year over year. 

That was also better than +0.3% monthly and +5% annually expected. 

That core rate of inflation is the lowest level since August 2021.

Treasury Yields Tumble On Cool CPI

Treasury yields are dropping this morning after the release of that better-than-expected CPI data. 

The 2-year yield is down 10 basis points to 4.78% while the 10-year yield is down six basis points to 3.92%.

The market is still pricing in a rate hike at the Fed’s meeting in 2 weeks. 

CME Group’s FedWatch Tool shows 89.9% of traders expecting a 25bps hike. 

But that is expected to be the bank’s final move with Fed futures predicting rates will remain in a range of 5.25%-5.5% until the end of the year.

Domino’s Jumps On Uber Partnership

Domino’s Pizza (DPZ) shares are rallying 12.5% ahead of the open after announcing a new delivery partnership with Uber (UBER). 

UBER shares are also up 1.7%. 

The agreement allows U.S. customers to orders Domino’s products through the Uber Eats and Postmates apps while Domino’s and its franchisees will then handle the delivery.

In Case You Missed It

• Activision Blizzard (ATVI) shares jumped 10% on Tuesday after a federal judge denied the FTC’s motion for a preliminary injunction against Microsoft’s (MSFT) acquisition of the video game company. The ruling puts the deal one step closer to going through but the FTC can appeal. The companies also must resolve opposition from the Competition and Markets Authority in the U.K. Microsoft said it will work with U.K. regulators to modify the deal. MSFT shares rose 0.2% on Tuesday.