Market Tensions Rise: Inflation, Interest Rates & Energy Prices

march 17 2024, Update

Let’s start with some key indicators for the week:

• SP500: -0.06% (indecisive)

• Nasdaq: -0.7% (negative)

• RSP: -0.66% (negative)

• Brent (OIL): +3.97% (negative for inflation)

• TNX (10-year yield): +5.26% (deteriorating)

• Inflation Nowcast for March: +3.33% (deteriorating)

• GDP Nowcast for Q1 2024: +2.3% (deteriorating from 2.5%)

Last week the CPI came hotter than expected at 3.17% YoY driven by rising energy prices, mostly. Unfortunately, oil prices are going up right now so inflation expectations are on the rise. That’s why we got a significant increase in the 10-year yield ($TNX).

This is a classic mix that is bad for growth stocks and real estate. Nothing to be too alarmed about just yet.

The SP500 is about 7% for the year and the Nasdaq is about 26% from the October 2023 lows, so a pause or pullback would be more than normal.

The mix in front of us suggests that at the FED meeting next week most likely we won’t hear dovish comments and expectations of rate cuts will be pushed further ahead. With en…