Podcast Summary
Retail Inflation Figures to be Released, Expected to Show 0.4% Monthly Increase in CPI: Markets await retail inflation figures, forecasted to show a 0.4% monthly increase in CPI, with the Fed meeting following on March 20th. Oracle's earnings and cloud business growth are also in focus.
This week, the markets will be closely watching the latest retail inflation figures, which are expected to be released before the bell on Tuesday. These numbers, which come before the March 20th Fed meeting, are forecasted to show a 0.4% monthly increase in CPI and a steady annual inflation rate of 3.1%. Core CPI, which excludes volatile food and energy prices, is predicted to have risen 0.3% on the month, with the yearly rate falling to 3.7% from 3.9%. According to a recent survey, a majority of JPMorgan clients believe that the release is more likely to surprise to the upside than the downside. Despite recent signs of disinflation ebbing, rates have been trending lower, with the 10 year treasury yield down about 10 basis points to 4.08%. The market is currently pricing in the near certainty that the Fed keeps rates unchanged at the next meeting, with the first rate cut expected in June. However, many economists and Fed officials are cautious about making hasty moves, citing past experiences such as the 1998 rate cuts during the Asian crisis and the 1960 6/67 rate hikes as potential mistakes. This means that recession risk may be higher than the increasingly bullish consensus would suggest. In earnings news, Oracle reports on Monday, and its cloud business is expected to drive a significant portion of the company's overall revenue growth.
Cloud Business Growth and Earnings Reports: The cloud business is booming, with a 25% increase in Q2 and expectations for continued growth. Several companies, including Dollar Tree, are set to report earnings, with Dollar Tree expected to see a 2.7% increase in same-store sales.
The cloud business is experiencing strong growth, with a 25% increase in Q2 and expectations for similar growth in the next quarter. Meanwhile, several companies, including ON Holding, Kohl's, Petco, Lennar, Dollar Tree, Adobe, Blink Charging, and Jbill, are set to report earnings. Dollar Tree is expected to see a 2.7% increase in same-store sales for the quarter, with a 5.4% gain for Dollar Tree stores. However, there are indications that momentum picked up at the end of the quarter for the Dollar Tree banner. Elsewhere, the US Department of Justice is investigating an incident involving an Alaska Airlines flight where a piece of the aircraft fuselage blew out midair earlier this year. The SEC has approved new requirements for public companies to disclose their greenhouse gas emissions, but the rule falls short of requiring reporting on scope 3 emissions, which companies opposed due to cost and complexity. Lastly, a study suggests that the upcoming Bitcoin halving event could boost the price of Bitcoin to over $115,000 in 2024.
Bitcoin halving and Gold's overbought conditions impacting crypto and commodities markets: The Bitcoin halving in April 2024 may increase demand and price, while Gold's overbought status could lead to slower gains in 2024.
The price prediction for Bitcoin by Coin Ledger is based on the token's value when it halves in April 2024. This event reduces the rate at which new Bitcoin tokens are created, leading to a potential increase in demand and price. Meanwhile, Gold's recent rally has left it overbought according to Bank of America's technical team, who predict a rise in price but slower movement in 2024. Despite the recent gains, Gold is up over 19% from a year ago and nearly 5% year to date. The Bitcoin halving and Gold's overbought conditions are key factors to watch in the crypto and commodities markets.