Market Waltzes Higher as Inflation Whispers Ease


Simpler Trading Team

May 10th 2023  .  4 min read

The market kicked off the day with a spring in its step, as traders digested the U.S. Consumer Price Index (CPI) inflation numbers for April. Inflation fears seemed to ease as the CPI came in at 4.9% YoY, just below the anticipated 5.0% mark. As the market opened, the slight dip in futures and overnight market activity hinted at a potentially exciting trading day.

What Happened in the Market

Today’s market performance saw certain sectors pirouetting to the top, while others stumbled. The technology sector flourished, partly due to easing inflation concerns. On the other hand, energy stocks struggled as crude oil and natural gas futures fell 1.6% and 4.0%, respectively.

Stock Performers – The Twirls and the Tumbles

Stocks such as Salesforce (CRM) leaped higher, boosted by their overall market performance. Meanwhile, shares like American Express (AXP), Nike (NKE), and Walt Disney (DIS) experienced some stumbles, underperforming in the Dow Jones Industrial Average.

The Eagerly Awaited Disney Earnings Report

The market eagerly awaits Walt Disney’s (DIS) earnings report, scheduled for release after the closing bell. Investors are on the edge of their seats, anticipating the impact of these earnings on the company’s stock and the broader market. Analysts have their eyes peeled for any updates on Disney’s streaming platform, Disney+, as its subscriber growth and retention rates have been a key focus in recent quarters. Additionally, the market will be scrutinizing the performance of Disney’s theme parks and resorts, as they have been gradually reopening worldwide.

The release of Disney’s earnings report could have far-reaching effects beyond its own stock. Competitors like Netflix (NFLX) and Amazon (AMZN), which also have streaming platforms, could experience price fluctuations in response to Disney’s earnings results. Furthermore, with the travel and entertainment sectors recovering from the pandemic, the performance of Disney’s theme parks could serve as an indicator for other companies in these industries.

Economic Reporting – The Inflation Tango: CPI & PPI Take the Floor

As the market danced to the tune of economic data, the spotlight fell on the U.S. CPI inflation report. With April’s headline inflation at 4.9% year-over-year, markets breathed a sigh of relief as the figure slightly undershot expectations. Core inflation, however, stepped to a higher rhythm at 5.5%, above the anticipated 5.4%. The market now awaits tomorrow’s Producer Price Index (PPI) inflation report with bated breath, looking for clues on the direction of inflationary pressures.

Tomorrow, the Producer Price Index (PPI) inflation will take the floor, and forecasts predict a year-over-year drop to 2.4% from last month’s 2.7%. Market participants will be closely watching the PPI data to discern any trends that could hint at future inflationary pressures. This economic indicator, which measures the average changes in selling prices received by domestic producers for their output, can provide valuable insight into supply chain and production costs. As economic indicators continue to shift, traders still continue to earn consistent profits, even in non-trending markets. To learn more about how Joe Rokop turned his $10k account into $400k in under two years, sign up for the encore presentation of his powerful webinar HERE.

Central Banks’ Choreography: Interest Rate Decisions

As the market twirls to the inflation tango, investors and analysts are keenly observing central banks for any potential policy shifts. Inflation’s upward trajectory has triggered speculation about the timing of interest rate hikes, with some experts predicting that central banks might need to tighten monetary policy sooner than expected. The Federal Reserve’s and other central banks’ upcoming meetings will be pivotal in shaping market sentiment and guiding investors’ moves.

Market Close

The market closed with the Dow Jones Industrial Average gaining 12.80 points, the Nasdaq leaping 154.50 points, and the S&P 500 climbing 26.93 points. As the curtain fell on today’s trading, investors could be seen applauding the market’s impressive performance.