Erik Schafhauser Zürich Erik Schafhauser Zürich Erik Schafhauser Zürich

Morning Brew June 13 2024

Morning Brew 1 minute to read
Erik Schafhauser

Senior Relationship Manager

Summary:  Digesting CPI and FOMC

Good morning,

That was quite a day!

The Dow ended down 0.1%, the S&P 500 closed up 0.9%,  and the Nasdaq added  1.5%.

Apple gained a further 2.85% and briefly took the top spot in terms of market cap globally. In the close, Microsoft could reclaim the lead at 3.28 trillion USD, Apple is at 3.27 and Nvidia 3.08.

According to preliminary counts, the AGM approves the 56 bio package for Elon Musk and the move to Texas from California. Elon Musk was also very vocal about the OpenAI integration to IPhones by Apple, stating he would ban Apple devices on Tesla premises if true and again stating he may launch a Tesla Phone.

The CPI came lower yesterday, the readings were 0.1% below the estimate and probably the most noteworthy was that there was no monthly increase from April to May.

The FOMC delivered a hawkish pause, basically pointing out the economy is too strong to cut rates now and cutting the expectation to 1 cut this year.

Yields rose again and the dovish expectation after the CPI faded, the USD gained, and precious metals lost previous gains again. The swings remain tremendous, Silver traded a range of 1.42, again justifying the implied volatility of 32% (1 month ATM)  

Powell went out of his way to point out that the FOMC members only learned the CPI numbers mid meeting and did not update their forecasts mid-meeting so the next comments and speeches by any of them will be very worth paying attention to 

The next Speeches are :
Tomorrow Austan Golsbee at a fireside chat
Monday Patrick Harker
Tuesday Barkin, Logan, Musalem, and Golsbee

Thursday:  Barkin,The agenda for economic releases is thin today and tomorrow, I expect focus to be on digesting yesterday and sentiment in equities.

The annual G7 meeting is starting in Italy today, topics are Climate, Africa, Climate change, the Middle East and Ukraine

China is saber rattling against the announcement of EU tariffs as was to be expected.

Key Data: 

  • Data: US Initial Jobless Claims, Manufacturing PPI


Data: EU Trade Balance, US Import Prices, University of Michigan Sentiment

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