Wall Street is up sharply, with investors betting that US inflation may have peaked in March. Rally del Nasdaq, which jumped by almost + 2% to 13,673 points; the S&P 500 advanced 1.16% to 4,464, while the Dow Jones rose nearly 300 points (+ 0.83%), to 34,591.
US equities rose after the publication of the data relating to the consumer price index, one of the main thermometers for monitoring inflation. The data showed that, in March, US inflation rose by 8.5% on an annual basis, at the strongest pace since January 1982. The index confirmed the acceleration of inflationary pressures, compared to at + 7.9% in February and + 8.4% on an annual basis expected by the consensus of economists.
That said, the core component of the consumer price index rose 6.5% yoy, up from + 6.4% in February, but at a slower pace than the + 6.6% estimated by analysts.
On a monthly basis, inflation advanced by 1.2%, as expected, up from the previous + 0.8%. Core inflation, on the other hand, rose by 0.3% on a monthly basis, at a slower pace than the estimated + 0.5% and also decelerating compared to the previous + 0.5%.
The rise is also the lowest since September, a factor that leads investors to hope that US inflation will sooner or later slow down, and therefore that Jerome Powell’s Fed will not be forced to excessive rate hikes. that could derail the recovery of the US economy.
The data also showed that US inflation-adjusted wages fell by 0.8% on a monthly basis in March, retreating by 2.7% on an annual basis.
Futures on US stock indices jumped immediately after the release of the data, with those on the Nasdaq rallying 1.6%.
Andrew Hunter, senior economist at Capital Economics, commented on the numbers in a note reported by CNBC, writing that “the big news of the March data is that it appears that core price pressures are really slowing the pace.” According to Hunter, the March hike could “spike” for inflation.
Not so optimistic Adam Crisafulli, founder of Vital Knowledge: “The news is positive, and people will be very happy to start seeing the inflation bubble on cars go flat. However, core inflation at 6.5% remains a lot. strong, and the Fed will be aggressive anyway this year. Perhaps if energy prices as well as other categories soften, then the Fed’s guidance will start to become less aggressive, but for now the status quo remains tightening. “, or rather a restrictive monetary policy characterized by a rise in rates and also by a reduction in the Fed’s balance sheet.
The easing of inflation fears has also translated into a retracement of US Treasury yields: 10-year rates fell by 6 basis points to around 2.70%, after yesterday flying up to 2.82%, a new record since December 2018. 30-year Treasury rates also fell 6 basis points to 2.79%. However, the decline in US government bond rates is offset by yet another flare-up in oil prices, whose trend continues to be in the grip of volatility: Brent and WTI jump by more than + 5.5%, respectively to $ 104 , 04 and $ 98.56 per barrel, after the OPEC alert, which warned that it will be impossible to replace the 7 million barrels per day of Russian oil and other energy exports from Russia, which has been hit by various sanctions and on point of collecting new punitive measures from the West.
In the meantime, buy back on hi-tech titles, among the most beaten up in recent sessions: Microsoft, Nvidia and Tesla are on the rise. Meanwhile, the US quarterly season is expected to start, which will see JPMorgan Chase and Delta disseminate the financial results for the first quarter of 2022 tomorrow, Wednesday 13 April. Purchases also on Devon Energy, Marathon Oil and Chevron, in the wake of the oil rally.