Inflation Cools • Fed Ahead • China Rate Cut

June 13, 2023 | Hoya Capital

Inflation Cools • Fed Ahead • China Rate Cut Daily Recap Jun 13 Written By Alex Pettee, CFA U.S. equity markets rallied Tuesday after the CPI report showed a continued cool-down of inflationary pressures, positioning the Federal Reserve to pause or potentially end its historically-swift rate tightening cycle. Closing at its highest level of the year for a fourth-straight session, the S&P 500 advanced another 0.7% today, pushing further into "bull market" territory.

Real estate equities finished mostly higher today, led by several of the more rate-sensitive property sectors. The Equity REIT Index advanced 0.6% today with 14-of-18 property sectors in positive territory. All eyes were on the Consumer Price Index report this morning. Headline CPI inflation moderated to 4.0% year-over-year rate in May - below consensus estimates of a 4.1% print. The metric that we watch most closely - CPI-ex-Shelter Index - showed an eleventh straight month of cooling in the year-over-year rate to just 2.1% in May.

Since July, this CPI ex-Shelter Index has shown an annual inflation rate of just 0.8%. Explore hoya capital INVESTMENT RESEARCH Income Builder Daily Recap U.S. equity markets rallied Tuesday after the critical CPI report showed a continued cool-down of inflationary pressures, positioning the Federal Reserve to pause - and potentially end - its historically-swift rate tightening cycle. Closing at its highest level of the year for a fourth-straight session, the S&P 500 advanced another 0.7% today - pushing further into "bull market" territory - while the Dow advanced 147 points.

The Mid-Cap 400 was the outperformer among the major benchmarks, with gains of over 1%. Downward pressure on the U.S. Dollar and a surprise rate cut from the Bank of China helped to lift WTI Crude oil prices from yesterday's fresh eighteen-month lows. Real estate equities finished mostly higher today, led by several of the more rate-sensitive property sectors. The Equity REIT Index advanced 0.6% today with 14-of-18 property sectors in ...