Last week, stocks and bonds retreated following a stubborn Consumer Price Index(CPI) print. The CPI was unchanged from the previous month and up 3.5% year-over-year. Following the CPI report, the market immediately reduced the probability of a June rate cut. Bank earnings beat most expectations on Friday, although they came with cautionary forward-looking statements from their COEs, including JP Morgan’s Jamie Dimon.
This week started with another strong retail sales report. March consumer spending increased by 0.7% from the previous month, surpassing the expected 0.4%. Strong consumer demand supports economic growth and potential inflation. E-commerce retail sales had the largest increase at 2.7%, while the category for sporting goods, hobbies, musical instruments, and bookstores experienced the largest decline -1.8%. Stocks will respond to earnings reports from major financial, industrial, and healthcare companies. Netflix (NFLX) will report after the closing bell on Thursday.
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