New York, NY – Investors brace themselves for potential market volatility as they await the release of April’s consumer price index report on Wednesday at 8:30 a.m. ET. The market consensus is described as “tight,” prompting expectations for significant short-term fluctuations in stock prices based on even minor surprises in the inflation data, according to Chris Senyek, chief investment strategist at Wolfe Research.
Despite the anticipation of sharp movements, Senyek remains steadfast in his current market outlook, stating that he does not foresee turning bearish unless indications of a looming recession in the U.S. or impending Fed interest rate hikes to combat inflation materialize. He emphasizes that neither scenario is currently part of his base case.
In another development, AMC Entertainment Holdings Inc. experienced a slight decline in premarket trading after announcing plans to issue over 23 million shares in exchange for $163,850,000 in principal amount of its second lien subordinated notes due 2026. The move comes amidst a resurgence in the meme stock craze, leading to a notable 135% surge in AMC’s share price throughout the week.
As investors eagerly await the CPI report, economists are projecting a 0.4% month-over-month increase and a 3.4% year-over-year rise in the consumer price index for April. Core CPI, which excludes volatile food and energy prices, is expected to have grown by 0.3% month-over-month and 3.6% year-over-year. Of particular interest to investors is the housing sector, where pricing pressures persist and play a crucial role in the Federal Reserve’s inflation targeting strategy.
In global markets, European stocks opened higher following the Nasdaq’s record close, with key indices such as the Stoxx 600, FTSE 100, DAX, CAC, and FTSE MIB registering positive gains. Meanwhile, in Asia, Japan’s electronics and LCD display manufacturer Sharp Corp faced a significant stock price decline after reporting an annual loss, primarily attributed to challenges in the Display Device segment.
In Australia, the government unveiled its annual budget aimed at alleviating the cost of living, boosting housing construction, and enhancing the healthcare system. Treasurer Jim Chalmers highlighted the budget’s focus on maintaining economic stability, delivering relief for households, and achieving back-to-back surpluses – a milestone not seen in nearly two decades.
Concerns over corporate misconduct resurfaced as the Justice Department alleged that Boeing had violated a 2021 agreement protecting it from criminal charges related to the 737 Max crashes. The company now faces potential legal action for failing to uphold compliance and ethics standards outlined in the agreement.
In after-hours trading, Western apparel retailer Boot Barn saw a 7% decline in its stock price after providing conservative revenue and earnings projections for the year. Conversely, solar technology company Nextracker experienced a 9% increase in its stock value following strong financial performance in the fiscal fourth quarter.
Overall, market participants remain on edge as they navigate through a landscape of economic data releases, corporate earnings reports, and regulatory challenges, shaping investment decisions in a volatile and dynamic environment.
