Nothing gets Wall Street pumped like an inflation slump. And this morning’s data (more in a minute) sent stocks soaring, with gold, silver, and Treasuries coming along for the ride. Crude oil also rose, while the dollar dropped.
Now about the inflation figures. The headline Consumer Price Index came in unchanged for May, while the core CPI rose just 0.2%. Economists expected readings of +0.1% and +0.3%. Core inflation (the light red line below) has now slipped to 3.4% year-over-year, the slowest since April 2021, while overall inflation (the dark red line below) is down to 3.3%. It peaked at 9.1% back in June 2022.
Source: Bureau of Labor Statistics
This is unabashedly good news for policymakers. The Federal Reserve still WILL NOT cut rates (as I noted yesterday) at the meeting that wraps up this morning. But it WILL release new economic projections and Chair Jay Powell WILL likely take a more dovish tone at his post-meeting press conference given the data. Just another reason to “Be Bold” as an investor, as I’ve been advocating since Q1 2023.
Meanwhile, in the technology sector, database software maker Oracle Corp. (ORCL) grabbed a share of the cloud computing spotlight with its latest earnings report. The company announced large contracts tied to its Oracle Cloud division, along with a new partnership with Alphabet Inc. (GOOGL). A measure of future expected sales called “total remaining performance obligations” soared 44% to $98 billion in the May quarter, helping propel ORCL shares to a record high.
