Stocks gave up yesterday’s gains after U.S. consumer prices recorded their biggest increase in more than three years in April as gasoline and rents rose. The data pointed to a steady inflation build-up that could give the Federal Reserve ammunition to raise interest rates in the November time period. Odds makers upped the possibility of a rate hike in November from 45% to 55%.
The inflation news coupled with a selloff in Home Depot stock pushed to Dow off 180 points to a closing level of 17,529. Trading volume was high. Energy stocks were up while utilities and retail were off. The markets are under pressure as the bulls and bears jostle for position.
To give you an indication of the extreme opinions and forces pulling at markets, Bank of America Merrill Lynch today said that investor sentiment is very bearish (I guess this is better than being “childish”) even while US industrial production rose way more than expected coming in at 0.7% instead of the predicted 0.3%. US housing starts also rose more than expected a groundbreaking was up 6.6% to an adjusted annual pace of 1.17 million units. This tells us the people are busy but not happy.
Prices on gold moved in the opposite direction of the US stock markets gaining $6.50 an ounce to $1,280. WTI crude oil continued to creep higher adding another 1.4% to $48.42 per barrel. Production disruption is the order of the day as forest fires in Alberta and the Niger Delta Avengers wreak havoc on two significant producers of the black gooey substance.
Have a good evening. I am taking our scout troop into the Ballard Norwegian Parade tonight.