The Dow closed lower for the eighth day out of the last nine trading sessions while the NDX again closed higher with a 0.31% gain led by Google which closed 4.32% higher. For the second consecutive day, American Indexes reversed some of their post inflation sell-off. PPI is now at its lowest level since January 2021 while Jobless Claims rose 264K versus 245K expected. Elevated housing costs and a resurgence of higher gasoline prices proved to be strong headwinds towards lower inflation. But as we approach the peak months of inflation from last year, the yearly comparisons will be harder to match which should show inflation falling further. Initial Claims unexpectedly rose to their highest level since October 2021. Microsoft (MSFT) has decided to freeze salaries for all full-time workers this year citing uncertain macroeconomic conditions. This is just the latest sign from the tech industry that companies are pulling back on expenses. Following several rounds of job cuts and freezes on hiring, a pause to wage gains from other major companies would ease wage growth’s negative impact on inflation. Toyota (TM) announced a $7.4 billion investment into its own electric vehicle (“EV”) unit. The carmaker which is now under new management pledged to catch up to competitors in the EV sector and even projected over 202,000 EV sales for the current year which would be more than five times its sales from last year. President Joe Biden and his administration have been seeking contact with Chinese officials including President Xi Jinping to ease growing tensions between the two nations. Domestic advisors warn that geo-political ramifications could turn negative if China continues to ignore attempts from the U.S. European Markets closed lower. The Bank of England raised its key interest rate by 25 basis points, marking 12 consecutive rate hikes. The central bank matched decisions from the ECB and Fed this month but struck a more hawkish tone when projecting future rate increases. But this should come as no surprise as the U.K.’s inflation rate was among the highest of the Group of Seven nations in March. European Central Bank President Christine Lagarde expressed her concern that inflation could continue to be persistent if the central bank does not fully suffocate it with further rate hikes. While Euro-Zone inflation has come down off its peak, several regions are still experiencing double digit inflation rates. European Central Bank Governing Council Member Francois Villeroy de Galhau said that the central bank only has a marginal distance left to cover to combat high inflation. He asserted that the bulk of rate hikes already instituted would be enough to bring inflation down from its peak, and that any further rate-tightening would be marginal movements to ensure a long-term growth rate of 2%. In Asia, China’s consumer inflation slowed to its weakest pace in two years while producer prices continue to remain in a deflationary state. The economic recovery coming out of the pandemic lockdowns has hit a rocky patch lately with several indicators suggesting economic activity is stagnating. This will only fuel support for further fiscal stimulus measures to be taken by the Beijing government. Elsewhere, Oil closed 2.33% lower, while a strong Dollar saw Gold fall 0.50%.
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