US stocks fell as investors watched a wall of inflation worry and an uncertain tightening path from the Fed. Traders are still digesting Waller’s support for the Fed to hike rates by half a point over several meetings. President Biden met with Fed Chairman Powell as the White House focuses on controlling inflation. It looks like they’re out of options, but a Chinese tariff easing might be on the table.
Eurozone inflation was stronger than expected and negative first quarter results in France and Denmark raise concerns about global growth.
In the United States, it is too early to say with certainty that the inflation peak is in place. Last week’s Core PCE data surprised with a reading below 5%, but uncertainty with commodity prices and China’s growth and COVID outlook should keep investors nervous.
AMC I knew AMC was going to have a great opening after my wife suggested we were going to see “Top Gun: Maverick” as our first movie in a few years. The highly anticipated sequel didn’t disappoint as Tom Cruise and Val Kilmer helped gross $156 million over the weekend. Inflation does not prevent Americans from going to the cinema. Shares of the cinema chain operator could not remain positive, however, as price fears mounted.
Crude prices have recovered after the EU was able to determine a partial ban on Russian oil and China’s crude demand outlook has improved significantly. The EU worked hard to get this partial ban approved, but much of it was already planned. The partial ban includes petroleum and petroleum products from Russia, while pipeline oil is temporarily exempted, which was necessary to gain support from Hungary. . The embargo is expected to affect two-thirds of Russian oil imports and cost them $10 billion a year in export earnings.
Chinese economic activity was better than expected and positive momentum was seen in the fight against COVID. China is a big wild card for the crude demand outlook and if it starts to see COVID fears ease even further, oil could push much higher if global production remains stagnant.
Oil prices gave up most of their gains after reports that OPEC was considering exempting Russia from its oil production targets, which would allow other members to increase production. After so much resistance to increasing production efforts over the past few months, no one really expected OPEC to signal a willingness to pump more crude.
Gold prices fell as global bond yields rose as investors became more concerned about inflation and global economic growth. It looks like gold needs China’s growth outlook to weaken, but not the Eurozone. Gold has a hard cap at the $1870 level and if the bond market selloff returns, the precious metal could struggle in the near term.
The end of the month offers exaggerated moves, but if gold breaks below the $1830 level, bearish momentum could take prices towards the $1800 level.
Bitcoin is holding comfortably above the $30,000 level as tech stocks look to reverse Wall Street’s bearish trend. Bitcoin continues to follow what is happening on Wall Street, but that could change if more institutional investors believe the crypto bottom has been reached.
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