Economy
The producer price index (PPI) rose by 0.5% in March, the second consecutive month-over-month increase of 0.5% but well below expectations for a 1.1% increase. Excluding food and energy prices, the index was up just 0.1%. While the consumer price index (CPI) is more widely referred to when referring to inflation, the PPI looks at inflation from a business standpoint, measuring the change in prices that domestic producers receive for goods and services. The Iran war has led to a spike in oil prices, and fears of rising inflation have resurfaced, complicating the Fed's future decisions with respect to monetary policy. We are less than two weeks away from the Fed's next meeting on April 29, and any change in rates at that time would be a surprise. The markets are currently pricing in the odds of a rate cut before the end of the year at about 25%.
Markets
Another phenomenal weeks for stocks saw the S&P 500 climb 4.54% and set multiple new all-time high closes, capped off by a surge higher Friday in response to news that the Strait of Hormuz is open for business. Hopefully that last remark holds true, because earlier this morning there were reports of the strait being closed again by the Iranian military. For now at least, it appears markets can shift their focus from the Iran war over to corporate earnings, which got off to a strong start. We've heard from a small percentage of companies in the S&P 500 on their last quarter's performance, but according to FactSet, 88% of those that have reported have exceeded analysts' expectations, a much higher rate than average.
What We're Reading
Have a great weekend.
Dogwood Wealth Management