23 Mar

Is US Inflation Signaling a Stronger Economy?

WRITTEN BY Sarah Sands

US inflation

According to the data provided by the U.S. Bureau of Labor Statistics, the US inflation index stood at 0.1% in February 2017, compared to 0.6% in January 2017.

This inflation figure was below the market’s expectation of 0.2%. It was released on March 15, 2017.

Is US Inflation Signaling a Stronger Economy?

The trailing-12-month inflation index stood at 2.7% as of February 2017. Rising inflation in the period was driven by the sharp rise in the energy basket. The energy basket rose 15.2% in the trailing 12 months, driven by stronger crude oil (USO) (USL) (UCO) prices.

The Fed’s rate hike

On March 15, 2017, the Federal Reserve announced an interest rate hike for the first time in 2017. The FOMC (Federal Open Market Committee) announced a hike of 25 basis points to the federal funds rate, bringing it to the range of 0.75%–1%.

The FOMC announced that it would raise the key interest rate twice more in 2017. In making this statement, the Fed indicated that it was optimistic about the US economy (SPY) (QQQ) (SPXL) and that we could see more rate hikes sooner, compared to the long wait leading up to the hike in December 2016.

The Fed’s indication of a faster rate hike process in 2017 suggests that US economic growth will also increase. If the labor market continues to show strength going forward, it could boost consumer spending, which could drive inflation (VOO) (IWM).

In the next part of this series, we’ll analyze the performance of US retail sales in February 2017.

Latest articles

Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.

The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.

Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.

Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.

14 Jun

IEA Again Slashes Its Oil Demand Growth Estimate

WRITTEN BY Rabindra Samanta

As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.

Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.