U.S. Indexes closed with an upward bias as the NASDAQ 100 outperformed, buoyed by strength in Mag-7 (ex-MSFT), with NVDA and MU being particularly fruitful. Nvidia CEO has joined President Trump on his trip to China, while Micron saw a chunky BofA PT lift. Focus resides around the Trump/Xi summit, as well as the Middle East, albeit there was nothing incrementally new, especially given that Trump is in China. Although VP Vance, on Iran talks, thinks they are making progress, and focused on a diplomatic pathway for now. US PPI garnered a hawkish reaction, as it was much hotter than expected across the board, which saw US indices and Treasuries fall, while the Dollar rose as it showed signs of broader price pressures beyond energy. The New Zealand Dollar was the G10 FX laggard, and hit on higher than anticipated inflation expectations, following on from the recent poor GDP print – raising stagflationary concerns. While in Europe, the focus resides around the UK and PM Starmer’s future, as he continues to be under significant pressure. The crude complex saw losses in choppy trade, in light headline newsflow, while precious metals were divergent – Spot Gold sits in the red and Silver in the green. Sectors are predominantly firmer, with Communications and Tech sitting atop the pile, with Utilities and Financials at the bottom. Back to Treasuries, which saw choppy trade, as the initial leg lower on PPI was offset by lower crude prices. On the Fed footing, Collins hopes the economy will allow for more rate cuts later this year, but it is possible the Fed will need to hike interest rates to cool inflation pressures. US PPI came in significantly hotter than expected. Headline producer prices rose 1.4% M/M, above both the 0.5% forecast and prior print, while the Y/Y rate accelerated to 6.0% from 4.0%, topping the 4.9% consensus. Although headline measures can be heavily influenced by swings in energy prices, the underlying details also pointed to broader inflation pressures. Nearly 60% of the April increase in final demand prices was attributed to a 1.2% rise in final demand services, reinforcing the hot services inflation seen in Tuesday’s CPI report and suggesting price pressures are becoming more widespread. Core measures excluding food and energy were also firm, confirming sticky underlying inflation. Core PPI rose 1.0% M/M (exp. 0.3%, prev. 0.1%), while the Y/Y rate accelerated to 5.2% from 3.8%, above the 4.3% forecast. Meanwhile, the supercore measure ex food, energy and trade rose 0.6% M/M (exp. 0.3%, prev. 0.2%), with the Y/Y rate climbing to 4.4% from 3.6%. The PPI components feeding into PCE were mixed. Portfolio management prices declined, while air passenger transportation prices cooled from the prior pace. Healthcare-related measures were broadly stable, with outpatient hospital care slowing while nursing home care accelerated. The hotter-than-expected PPI report, alongside signs of broader inflation pressures beyond energy alone, strengthens the case for Fed hawks and reinforces the Fed’s ability to focus more heavily on inflation risks rather than labour market weakness, particularly as recent employment data continues to point to a relatively stable jobs market. Oxford Economics noted that higher energy costs are beginning to bleed into broader goods and services categories, including transportation, which should keep producer price inflation elevated in the months ahead. The consultancy also highlighted AI-related demand and DRAM shortages as drivers of elevated electronic component prices. OxEco currently tracks April headline PCE at 0.4% M/M and 3.8% Y/Y — the hottest since May 2023 — while core PCE is seen at 0.3% M/M. Fed Member Kashkari said that Inflation is too high, and huge question mark about how long the Hormuz Strait will be closed, and that will have a big effect on inflation. The Minneapolis Fed President said he is not surprised by the headline inflation rise, and what matters is how persistent the strict closure is. Speaking on the new Fed Chair, Kashkari noted they have a lot of influence and will have to persuade other policymakers. Elsewhere, Oil closed lower by 1% while Gold was flat.
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For anyone following my Platinum Service it made 348 points yesterday and is now ahead by 440 points for May having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
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