Inflation is still soaring.
And apparently, the markets no longer care.
Consumer prices for March jumped 8.5% year over year, which came in above expectations for 8.4%. We haven’t seen numbers like that since December 1981. Core inflation was at its highest points since August 1982.
However, there was some good news in today’s CPI data.
Core CPI – which excludes food and energy — was up 0.3%, which was just below expectations for 0.5%. With that, the market believes inflation may be moderating, which is why markets were rallying in pre-market. However, that’s only a month over month figure.
Year over year, core CPI is up 6.5% from last month’s year over year pace of 6.4%. So, don’t get too excited. That number alone is why we’re not buying into today’s rally.
Plus, according to Barron’s, “The jump in prices marks the seventh-straight monthly increase in the annual pace and the fastest inflation the U.S. has seen in more than 40 years. That pace will add to mounting pressure on the Federal Reserve to move faster to rein in spiraling inflation, potentially by raising interest rates by a half-point when central bank officials meet.”
With higher rates on the way, some of the best stocks to own are financials, as we discuss here.
Markets
- The Dow is up 209 points to 34,428
- The S&P 500 is up 47.5 points to 4,456.25
- The NASDAQ is up about 258 points to 14,257.50
- Gold prices are up $19.97 to $1,972.70
- Bitcoin is down 1.35% to $40,533.50
- Oil prices are up $3.63 to $97.92
- The VIX is down 1.83 points to 22.54
Trading Tips
With inflation on the run, keep an eye on stocks, like WP Carey (WPC). WPC is a net lease real estate investment trust (REIT) that buys properties directly from companies, and then leases them back to an oftentimes reliable tenant. That’s also referred to as a lease-back. Another interesting catalyst for WPC is that most of its rental agreements include rent increases for inflation. In fact, nearly 60% of the agreements are tied to CPI. WPC also carries a dividend yield of 5.18%.