“If you have an approach that makes money, then money management can make the difference between success and failure… … I try to be conservative in my risk management. I want to make sure I’ll be around to play tomorrow. Risk control is essential.” – Monroe Trout

1. Biden Announces Tariffs on $18 Billion of Chinese Imports — The Biden administration said it would impose new tariffs on $18 billion of Chinese imports—a move it says will protect U.S. businesses but could put new pressure on prices as the election looms. The tariff rate on certain steel and aluminum products will increase to 25% from a range of zero to 7.5%. Tariffs on semiconductors will double to 50% by 2025, while those on solar cells will do the same this year. The levy on Chinese electric vehicles will quadruple to 100% in 2024, while those on lithium-ion batteries will increase to 25% from 7.5%. Medical products, such as syringes and needles, and ship-to-shore cranes will also see new or increased tariffs.
2. US Producer Prices Top Forecasts — The producer price index for final demand increased 0.5% from a month earlier, driven largely by services and following a downwardly revised 0.1% drop in March, Bureau of Labor Statistics data showed Tuesday. Compared with a year ago, the PPI rose by the most since April 2023. Among those, the cost of hospital outpatient care fell 0.1% and airfares dropped 3.8%. Prices for physician care rose modestly. At the same time, prices for portfolio management services increased 3.9%. The April PCE price gauge is due later this month.
3. Inflation Eases as Core Index Hits Lowest Level Since 2021 — The consumer-price index, a gauge for goods and service costs across the U.S. economy, rose 3.4% in April from a year ago, the Labor Department said Wednesday. So-called core prices that exclude volatile food and energy items climbed 3.6% annually, the lowest increase since April 2021. Both figures were in line with economists’ expectations. Because it will likely take another two reports to shore up officials’ confidence that inflation can return to the lower levels that prevailed before the pandemic, the Fed might not be ready to cut interest rates before September. Price pressures remain for millions of Americans. Gasoline prices pushed up overall inflation, while consumers continued paying more for housing in April. But year-over-year rent increases slowed from a month earlier, a key sign for economists that a big driver of inflation in recent years is slowly easing.
Costs of groceries and vehicles also edged lower in April from the previous month, while price increases for medical care slowed.

The week ahead — Economic data from Econoday.com:

Posted in Weekly Summary | No Comments »