Despite the analyst’s prognostication that the CPI had peeked, we learned yesterday that inflation keeps chugging along at 40-year highs bringing out the bear to set new 2022 lows by the close.  Today we get another look at the impact of inflation on producers with the PPI report.  We will also see if jobless claims declined as analysts expect before the bell.  Though bond yields are declining this morning, the national average gas price ticked higher to $4.42, increasing the consumer’s pressure which does not bode well for the consumer sentiment report expected Friday morning.

Asian markets saw red across the board, with Hong Kong leading the selloff down another 2.24%.  European markets also see nothing but red this morning, with the DAX, FTSE & CAC down more than 2%.  With another busy day of earnings and critical economic data pending, U.S. futures point to a bearish open but have recovered substantially from overnight lows.  Get ready for another day of wild price swings.

Economic Calendar

Earnings Calendar

We have a busy day on the Thursday earnings calendar, though the number of notable’s continues to decline.  Notable reports include AFRM, ACB, TAST, COMP, CEG, CYBR, DUOL, AG, HGBL, HIMX, LSF, LZ, PDFS, PHUN, POSH, RYAN, SIEGY, SIX, DTC, SQSP, TPR, TTM, TOST, UTZ & VZIO.

News & Technicals’

Tether sank to as low as 98 cents Thursday morning, according to data from CoinGecko.  It’s meant to be pegged one-to-one to the U.S. dollar.  Tether’s decline came after terraUSD, a different stablecoin, plummeted below 30 cents Wednesday.  Bitcoin continued to decline losing 2021 gains, falling as low as $26,595.52 Thursday morning, hitting its lowest level in over 16 months.  Ether’s second-biggest digital currency tanked as low as $1,789 per coin.  A growth slowdown is underway in the U.K. after the economy shrank by 0.1% in March, with economists expecting further contractions this year.  The surprise monthly contraction presents a worry for Prime Minister Boris Johnson’s government as the country’s cost-of-living crisis is yet to reach its peak.  Sterling hit a two-year low versus the U.S. dollar following the GDP data as traders digested growing uncertainty about the U.K.’s economic outlook.  NATO membership would be a historic decision for Finland, which shares a 1,300-kilometer border with Russia.  Atlantic Council’s Northern Europe director Anna Weislander says both Finland and Sweden are well prepared to meet the oft-repeated political and military threats against the move by Russian President Vladimir Putin.  The armed forces of both countries enjoy high compatibility with NATO member states, she said.  A growth slowdown is underway in the U.K. after the economy shrank by 0.1% in March, with economists expecting further contractions this year.  The surprise monthly contraction presents a worry for Prime Minister Boris Johnson’s government as the country’s cost-of-living crisis is yet to reach its peak.  Sterling hit a two-year low versus the U.S. dollar following the GDP data as traders digested growing uncertainty about the U.K.’s economic outlook.  Treasury yields fell in early Thursday trading, with the 10-year dipping to 2.84% and the 30-year declining to 2.99%.

After learning that inflation keeps chugging along at 40-year highs, we experienced another hectic day of whipsaws on Wednesday that set new 2022 lows at the close.  Though indicators suggest a substantial short-term oversold condition, the market faces another reading on inflation before today’s open to determine the level of pressure in producer prices.  We will also get a reading on the Jobless Claims that analysts project declined last week, and they are also expecting a decline in PPI.  However, futures markets don’t seem to share that confidence this morning after yesterday’s disappointment.  So, will the data continue to pile on the gloom inspiring the bears, or will it give confidence in the bulls to begin a relief rally?  We will soon find out.  The news that Findland and Sweden may apply to join NATO is another thing to keep an eye on as Russia warns of a Catastrophic conflict that could be the result.  Traders should expect the wild price action to continue with so much uncertainty.

Trade Wisley,

Doug