Market Analysis

Morning Bid: Markets Anticipate US CPI and Record Highs

Amos Simanungkalit · 14 May 20244.5K Views

A Look Ahead in European and Global Markets by Tom Westbrook

With stocks nearing record highs and the resurgence of Bill Hwang and Roaring Kitty in the news, this week brings a sense of déjà vu as we await U.S. inflation data.

The focus is on Wednesday's CPI figure, overshadowing other significant events such as British labor numbers, German sentiment, U.S. producer prices, Jerome Powell's appearance, and earnings releases through Tuesday.

As in 2021, the CPI is expected to start with a 3, and markets are speculating whether the inflation uptick is temporary or a lasting trend. A lower-than-expected CPI could ignite stock rallies in Hong Kong, London, and New York.

Britain's FTSE and Europe's STOXX 600 index recently hit record highs, with the FTSE reaching its peak last Friday. The S&P 500 is also close to surpassing its March record high.

The Hang Seng has surged 20% in a rally now entering its fourth week, buoyed by steady Chinese economic data and positive policy signals. Indications from the Politburo about property support, plans for special bond sales, and falling lending rates suggest monetary policy limits are being reached, raising expectations for increased economic spending.

Currency markets are holding steady ahead of the CPI release, with the dollar firm and the yen at its weakest since early May when traders suspected Japanese intervention.

GameStop (NYSE: GME) and other meme stocks surged on Monday after Keith Gill, also known as Roaring Kitty, posted on X.com for the first time in three years. This move hints at the potential volatility that could follow if the CPI figures are lower than expected.