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Every Wednesday we publish “The Mid-Week Wrap-Up” — your ticket to being well informed and staying ahead in the investment game!

This report is designed to help investors of all skill levels break down important stories/topics within the stock market. And best of all, we cut through all of the BS and give you exactly what you need to know in easy to digest, bite sized pieces of content.

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Market Talk

The market is lower to start this week, with the major indexes all tumbling today after a hot inflation report.

3 Stories Moving the Market

These are some of the biggest stories so far this week that are having an influence on market action.

Inflation rose 3.5% from a year ago in March, more than expected

The Consumer Price Index (CPI) increased more than expected pace in March, pushing inflation higher and likely putting an end to hopes that Federal Reserve will be able to cut interest rates anytime soon.

The CPI rose by 0.4% month-over-month, surpassing economists' expectations of a 0.3% increase. This led to a 3.5% inflation rate over the past 12 months, up by 0.3 percentage points from February.

Even excluding volatile food and energy prices, the core CPI also rose by 0.4%, with a year-over-year increase of 3.8%. This suggests concerns that inflation may be more persistent than previously anticipated.

These higher-than-expected inflation figures have diminished hopes for the Federal Reserve to cut interest rates in the near future. Previously, there were expectations for rate cuts starting in June, but now, traders in the market predict the first cut to be in September, with a total of only two cuts expected this year. 

Costco selling as much as $200 million in gold bars monthly, Wells Fargo estimates

Costco's introduction of gold sales last year has proven highly lucrative, with sales rapidly accelerating since its debut in the summer of 2023.

Analysts at Wells Fargo estimate monthly revenue to be between $100 million to $200 million, indicating substantial interest driven by competitive pricing and strong customer trust.

The product, 1-ounce bars of nearly pure 24-karat gold, typically sells about 2% above the spot price, which was around $2,357 an ounce as of Tuesday.

This surge in sales comes amidst a backdrop of rising gold prices, up over 13% in 2024, driven by inflation concerns and investor apprehension regarding the deteriorating U.S. fiscal situation, with a projected $2 trillion deficit this year and total debt exceeding $34.6 trillion.

Boeing’s quarterly airplane deliveries drop to 83 amid safety crisis

In the first quarter of the year, Boeing experienced a notable decline in airplane deliveries, marking the lowest figures since mid-2021.

Boeing handed over 83 planes in the first three months of the year, predominantly 737s, compared to 157 in the previous quarter and 130 in the same period last year. In March alone, Boeing only delivered 29 planes.  Despite these challenges, Boeing continues to receive orders for new jets, with 111 orders recorded last month, primarily for 737 Max aircraft, notably from American Airlines.

The scrutiny on Boeing intensified after a midair incident in January involving a 737 Max 9 plane, where a door plug blew out. The incident prompted the Federal Aviation Administration to inspect Boeing's 737 Max production and halt the increase in output until quality control procedures are approved.

Meanwhile, Boeing is under even more pressure this week following two incidents: an engine cowling fell off a Southwest Airlines Boeing 737-800 during takeoff from Denver International Airport, striking a wing flap, and allegations from a Boeing whistleblower regarding safety and quality concerns in the production of the company's 787 and 777 jets.

Boeing has announced plans to slow down production to enhance quality control and minimize disruptions in manufacturing processes.

The Second Half

The second half of the week will see the PPI report and bank earnings. Both will have significant influence on market action.

Earnings Reports

The major banks kick off earnings season on Friday. Specifically, here at The Investor’s Edge we will be watching JPMorgan and BlackRock:

Here is the calendar of earnings releases scheduled for the rest of the week:

Economic Reports

Here is the calendar of events scheduled for the remainder of the week:

After this morning’s CPI report showed inflation rising again, investors will be closely watching Thursday’s PPI report. Friday’s consumer sentiment will also give us an idea of how consumers feel about the economy and their inflation expectations going forward.

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Thank you for reading this edition of the Mid-Week Wrap-Up.

Until next time investors!

Mark & Chris

The Investor’s Edge

Disclosure

This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.