Here is what you need to know on Wednesday, May 11:
Oh well, there goes the hopes for a rally then. We were all geared up for a benign CPI report. Economists had promised us that used car prices were slowing, and this among other factors would lessen the impact of price rises. Investors are on the sidelines with cash to invest, and sentiment was terrible. Things looked ripe then for a short, sharp bear market rally.
Instead, we got a number surprisingly high, and things began to look overly bearish. This, however, would be the perfect time to smoke out all those longs and then let the rally begin. The next few hours are all noise before the real money decides our fate. Bond yields will actually be what decides our fate, and the initial reaction was not good. Check out the 2-year bond yield chart below. Yikes, a spike up to 2.84%, but already it is coming straight back down. Markets will drift for a few hours before the big money piles in. This is crucial to give us our direction for the month ahead. So far bonds are all higher across the curve, but watch this space. Bonds have been nervous themselves as evidenced by their VIX – the MOVE index – also spiking.
US 2 year yield, 5-minute chart
The dollar went on a charge of its own after the CPI print but has retraced slightly. It is still higher for the day at 104.04. Oil is also gaining and is back above $102. Bitcoin is back below $30,000, and gold is at $1,839.
European markets are higher: Eurostoxx +0.3%, FTSE +0.1% and Dax +0.9%.
US futures are now lower: S&P -0.6%, Dow -0.4% and Nasdaq -1.2%.
Wall Street (SPY) (QQQ) News
US CPI 8.3 % versus 8.1% expected.
US Core CPI 6.2% versus 6% expected.
German Finance Minister says country may already be in stagflation.
EU and UK argue over Gibraltar and Northern Ireland.
Wendy's (WEN) missed on top and bottom lines. Down 3%.
Krispy Kreme (DNUT) beats on top and bottom lines. So we are eating burgers instead of donuts. That's healthy!
Perrigo (PRGO) revenue ahead, but profits behind estimates.
Tesla (TSLA) begins shipping from Giga Shanghai again.
Chicken Soup for the Soul Entertainment (CSSE) to acquire Redbox (RDBX).
Roblox (RBLX) fell 12% after earnings but back to nearly flat now.
Unity Software (U): poor revenue guidance, shares fall 22%.
Coinbase (COIN) is not coining it in anymore, shares fall 14% on earnings.
Occidental (OXY) repaid Warren's faith as it beat on earnings.
Toyota (TM) said profits could slump 20% on surging supply costs. Read across for all auto manufacturers, legacy and electric.
Playboy (PLBY) up on strong earnings.
ICL Group (ICL) up on strong earnings.
Upgrades and Downgrades
Source: Benzinga Pro
Economic Releases
The author is short Tesla and Twitter
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