U.S. CPI data: S&P 500 may not hold the 5,000 level

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on Apr 10, 2024
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  • U.S. inflation stood at 3.5% for the year in March versus 3.4% expected.
  • Evercore ISI analyst sees downside in S&P 500 to the 4,750 level.
  • SPX is currently up well over 10% versus its year-to-date low.

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S&P 500 may open in the red today after the U.S. Bureau of Labour Statistics said inflation was up more than expected in March.

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Analyst shares outlook for S&P 500

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Versus a year ago, the consumer price index (CPI) stood at 3.5% last month while the Dow Jones estimate was for 3.4%.

The economic data may be a headwind for the S&P 500 that Julian Emanuel – a senior analyst at Evercore ISI recently said could tank to the to 4,750 level as “there is a lot of good news baked in”.

He also sees short interest at a decade low as a sign that equities are experiencing “fear of missing out or FOMO.

For the month, headline inflation came in up 0.4% on Wednesday versus a 0.3% increase expected. S&P 500 is currently up more than 10% for the year.

Core inflation data for March

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Excluding food and energy, the so-called core consumer price index was at 3.8% for the year – hotter than 3.7% increase that economists had forecast.

Julian Emanuel is dovish on the S&P 500 also because four consecutive months of gains for S&P 500 is something “you haven’t seen more than once or twice in an investing life time”.

Note that core CPI for the month came in at 0.4% today versus up 0.3% expected.

The U.S. Federal Reserve is scheduled or its next policy meeting in May. Last month, members of the Federal Open Market Committee signalled three rate cuts this year as Invezz reported here.

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