On Tuesday, investors around the world focused on the US inflation report for the next day. At the same time, it became known that annual consumer price growth in China in March fell to only 0.7 percent, which is lower than at any time since September 2021 and lower than expected. In addition, producer prices fell.
The increase in US consumer prices in February was 6.0 percent, the same as in September 2021, and the consensus estimate for March is 5.2 percent. However, the core inflation rate is expected to increase from 5.5 to 5.6 percent. This measure, which excludes energy and food, is particularly important to the Federal Reserve’s decision-making process. If surprisingly low, the stage is set for more optimism among investors.
The possibility that Fed Chairman Jerome Powell will hold off on raising interest rates is already creating a growing appetite for risk in the market. This particularly benefits more speculative investments, such as cryptocurrency. Thus, on Tuesday afternoon, the price of bitcoin rose again above $30,000, for the first time since June last year. The level has now nearly doubled from last year’s low in November, and the development has lifted cryptocurrency-related stocks. Crypto broker Coinbase rose more than 8 percent in the fourth hour on Tuesday, while Microstrategy, an information technology company that has invested heavily in bitcoin, gained 6 percent.
In the automotive sector, BMW reported that the number of cars sold in the first quarter was 1.5 percent lower than a year earlier, but a slight increase is expected for the whole of 2023. In addition, there is a “significant growth” in sales of electric vehicles, and the demand for the most expensive BMW models remains high. This contributed to an increase in the share price by 2 percent.
In the US, CarMax provided its first quarter accounting. The used car dealer beat analysts’ earnings expectations in its most recent quarter, but it missed the top line. On Tuesday afternoon, the share rose about 9 percent.
However, the price of Carmax is 30 percent lower than it was a year ago, mainly on expectations of an economic slowdown or even a “hard landing.” The International Monetary Fund is among the pessimists. The organization now estimates that within five years the global economy will have an annual growth rate of 3 percent anemia. For developed countries, this year’s GDP growth is expected to slow to 1.3 percent from 2.7 percent last year.
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