Stock Market News: CPI Data Helps Stocks
Yesterday’s retail sales data helped the stock market early on, and today’s consumer price index (CPI) data is doing the same thing again today. Also, it looks like inflation is up, and that is creating a certain amount of optimism about the US economy. Investor’s Business Daily has the news on stock futures and economic data:
Nasdaq futures climbed 18 points vs. fair value, S&P 500 futures rallied 8 points and Dow futures tacked on 71 points.
On the economic front, monthly consumer prices rose 0.6% in May, the biggest jump in six months and slightly hotter than estimates of 0.5%. The rise was led by a 5.7% hike in gasoline prices. Food prices gained 0.3%. But core prices, which exclude food and energy, rose 0.2%, matching estimates.
On a year-over-year basis, consumer prices climbed 4.2%. Core inflation is up 2.3%, or above the central bank’s comfort zone of 1% to 2%.
Usually, when consumer prices rise, this is good news for companies. However, I’m not sure how long this good news will last. After all, periods of inflation that lead to true economic growth (as opposed to a smattering of “confidence”), wages are remaining stagnant. So while prices are rising, it is unclear how long American consumers will be able to keep up with them.
Last month’s retail sales data was not as encouraging as “they” would have you believe, since it was largely based on economic stimulus checks. This means that Americans have been able to keep up with rising prices because of the one-time windfall they are receiving. Unfortunately, once all the stimulus checks are through the system, it may not take very long for things to fall apart again.
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions.
Tags: stock market, stock market news, investing blog, CPI data,
economy, investments, stimulus checks
