What Happened: Consumer Price Index (CPI) is reported higher than anticipated.

 

What Does it Mean?

Despite a significant decline over the past year, the Consumer Price Index was reported on Wednesday as having increased 3.5% vs an expected 3.4% and an increase above February’s 3.2% rate.

 

Why Do We Care?

The stock market continues to take its cue from interest rates, which are in turn heavily influenced by inflation reports guiding the Federal Reserve. Despite earlier predictions of multiple rate cuts in 2024, sticky inflation reports are now leading many to believe rates will remain higher for longer. The natural result of this idea has been lower stock prices, which is what transpired this week.

For a while now we’ve been talking about a long-awaited correction, which seems to be upon us now. In our opinion, healthy bull markets shouldn’t go straight up, but rather digest and consolidate along the way. Despite a strong start for the year in the stock market, it is our opinion we may see increased volatility in the coming weeks. We feel it will be very important for investors to remain calm and patient. At this point we don’t feel this is anything more than a normal healthy correction. While they’re never fun, they are all part of the process.

 

 

What Happened:  JP Morgan reports over $13B in profit for Q1 while discussing a challenging future environment.

 

What Does it Mean?

If you take a look at our video which was shot a day before JP Morgan reported earnings, the above headline is no surprise to us however it doesn’t change the fact that investors took down JPM stock by over 6% today helping to drag the Dow down by over 400 points.

 

Why Do We Care? 

There is no real meat in the story above other than the fact that our Thursday video paints a picture of precisely what JP Morgan and Jamie Dimon have done for years. We feel it important to understand this and rather than allow the headlines to scare us, know that it is all part of the business. I probably would have been more surprised to hear Jamie talk positive about the future than negative.

 

Until next time

~ Quint

 

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