Inflation is HOT, HOT, HOT

Today in the Market (3/10/2022)

Good Evening. Stocks in the United States have resumed their downward trend. Thursday came as US economic data showed another 40-year high CPI print.  Additionally, discussions between Russia and Ukraine’s foreign ministers failed to make headway on establishing a truce.

After achieving its greatest rise in two years the previous session, the S&P 500 fell 0.43%.  The DOW dropped  0.34%, after a 650-point rally Wednesday. The NASDAQ dropped nearly 1%. Meanwhile, the yield on the 10-year US Treasury increased 6.6 basis points to 2%. The 30-year yield in the United States increased to 2.39%, the highest level since May 2021.

STOCK SPLIT

Amazon (AMZN) jumped as much as 7% in pre-market trading and almost 6% after closing on Thursday after the e-commerce behemoth said that its board of directors has approved a 20-for-1 stock split.  The split will be the first since September 1999 and the fourth in the company’s history.  In addition, Amazon will implement a $10 billion share repurchase program.

The stock will begin trading on the new basis on June 6, if shareholders accept the split.

While Amazon’s stock split may have no impact on the firm’s fundamentals, it may tempt investors back into a stock that has been stagnating due to slower growth as the company ramps up spending on multiple programs.

INFLATION

Inflation is HOT, HOT, HOT

The Consumer Price Index (CPI) increased 7.9% in February over the previous year.  This marks  the largest yearly increase since 1982 and surpasses January’s prior 40-year high of 7.5%. According to Bloomberg data, the amount was in line with consensus economist estimates.

“Robust pay increases have been no match for the higher costs households are facing on rent, food, electricity, gasoline, and a pervasive list of both goods and services,” Greg McBride, chief financial analyst at Bankrate, said in an email on Tuesday. “The buying power of Americans is being squeezed more and more each day, and you see this reality reflected in the dour consumer sentiment readings.”

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