As the New York session came to a close to start the new trading week, the markets were highlighted by the first tweets in 3 years from meme king Roaring Kitty. His tweets sent Gamestop shares soaring 74.40% to $30.45 (from $17.46 at Friday's close). AMC shares also rose sharply with a gain of 78.35%. In all, he posted 12 tweets (is he overdue) full of hints at what will undoubtedly lead to a maze of speculation. Indeed, someone purchased a number of $25 call options to expiration on May 17 for $0.21 ($27K total), making a market gain of $2M (“I'm a Big GameStop Shopper”).
In other news:
- The New York Fed's inflation forecast for May indicates a mixed but cautiously optimistic outlook. Consumers' one-year inflation expectations rose to 3.3% from 3.0%, while three-year expectations fell slightly to 2.8% from 2.9%. Interestingly, five-year inflation expectations also rose to 2.8% from 2.6%, indicating some concerns about long-term stability. Additionally, while consumer confidence in job retention has improved, optimism about finding new jobs has declined. Expectations of increases in house and commodity prices are rising, in contrast to a slight decline in expected earnings growth to 2.7%, although this is still above pre-pandemic levels. These trends, coupled with a one-year rise in inflation in Meshingan compared to last week, may be a cause for concern for the Fed. Not only is inflation still above 3% in the short term at least, it is also moving higher (which is not good).
In today's Fedspeak, both Fed Governor Jefferson and the President of the Cleveland Fed. Both Meister spoke. Meester is counting down the days until her retirement in June. As a result, it had nothing to say from an economic/political point of view.
- On the other hand, Fed Governor Jefferson (and voting member) discussed the current state of the US economy, acknowledging significant progress, particularly with regard to lower inflation and labor market flexibility. He described the economy as being in a strong position, although he noted a slowdown in the rate of decline in inflation and identified inflation as a continuing area of concern. Given the overall economic strength, Jefferson emphasized the need to focus on inflation, calling for maintaining a restricted interest rate. He stressed the importance of looking for more evidence that inflation is easing before considering changes to the interest rate, suggesting that it should remain restrained until there is a clear indication that inflation is easing. Of nine headlines, Jefferson mentioned concerns about inflation in six of the nine. It is clear that he is in no hurry to cut interest rates soon.
- In other central bank news, SNB President Thomas Jordan expressed that the battle against inflation is nearing an end. However, he stressed the continued uncertainty and the need for continued vigilance. Swiss inflation expectations have improved significantly, indicating a more stable economic environment ahead. Although the SNB has already implemented interest rate cuts, the bank president's comments suggest that further adjustments to interest rates may be expected to ensure stable inflation rates.
US stocks close mixed:
- Dow Jones Industrial Average, -0.21%
- S&P -0.02%
- NASDAQ +0.29%
- Small-Cap Russell 2000, +0.11%
A look at the US debt market:
- The two-year yield is 4.867%, unchanged
- The 5-year yield is 4.509%, -0.9 basis points
- 10-year yield 4.490%, -1.4 basis points
- The 30-year yield is 4.631%, -1.4 basis points
Crude oil traded higher today and closed above its 100-day moving average. The price is trading at $79.12. The 100-day moving average is at $78.38.
Bitcoin is trading steady at $63,050.