Good morning contrarians! Stock futures are quiet ahead of producer prices,which is arguably more of a leading indicator than the CPI because producers just pass higher costs on to consumers. Or so the theory goes…
The CPI yesterday didn’t have much of an impact, though the Nasdaq was quietly up 1%. Let’s see if the PPI can move markets. Tech stocks and cryptos would appear to indicate that risk appetite is alive and well and investors still seem to want to bid up these riskier parts of the market.
What yesterday’s CPI did do is raise the odds the Fed will stand pat at its next meeting on June 14, at least in the eyes of futures traders. Fed fund futures are now pricing in a 92% chance of no change to interest rates at the next FOMC meeting. Yesterday that number was 79%.