Federal Reserve officials may not be ready to finalize closely watched projections for interest rates until the publication of a key report on consumer prices on the final day of their two-day policy meeting.

Disappointing inflation data since the projections were last updated in March are almost certain to prompt a downgrade to the number of rate cuts envisioned for this year. But the May consumer price index reading, out Wednesday at 8:30 a.m. New York time, will probably help determine how many reductions get taken out of the central bank’s “dot plot” displaying the expected rate path.

The European Union will slap additional tariffs of as much as 38.1% on electric vehicles shipped from China as of next month, escalating a global trade war and upping the cost of selling cars in Europe for companies ranging from China’s BYD Co. to Tesla Inc.

The British economy stalled in April 2024, after a 0.4% rise in March, and in line with expectations. It is the weakest performance in four months, as a fall in industrial output and construction offset a rise in services.

Production output fell by 0.9%, following growth of 0.2%, led by a 1.4% decline in manufacturing, mostly basic pharmaceutical products and pharmaceutical preparations (-6.1%) and food products, beverages and tobacco (-2.3%).

On the other hand, the output rose for water supply; sewerage, waste management (1.3%), mining and quarrying (0.8%), and electricity, gas, steam and air conditioning supply (0.5%). Meanwhile, construction output shrank 1.4%, its third consecutive monthly fall. Services output on the other hand, grew 0.2%, its fourth consecutive monthly growth, led mostly by computer programming, consultancy and related activities (3.2%), telecommunications (1.7%), publishing (4.9%) and professional, scientific and technical activities activities (1.2%).

India’s stocks market plummeted, erasing almost $35 billion in market value, as tallies signaled that Modi’s ruling party was struggling to win a majority of seats in national elections, a stunning result after exit polls showed he was on pace for a landslide victory.

The annual inflation rate in South Korea eased to 2.7% in May 2024, from 2.9% in the prior month and compared to market forecasts of 2.8%. It was the lowest reading since July as cost rose at a softer pace for food and non-alcoholic beverages (5.1% vs 5.9% in April); housing, electricity, gas and water (1.4% vs 1.8%) and restaurant and hotels (2.9% vs 3%). Meantime, prices went up at a faster pace for transport (3.8% vs 2.9%). On a monthly basis, consumer prices picked up by 0.1% after stalling in the previous month, below market expectation of 0.2% rise.

Stock gauges in India hit intraday record highs Monday, with both the Nifty 50 index and BSE Sensex rising more than 3%.

Both indexes hit record level highs and logged their best intraday gains since Feb. 1, 2021, according to LGEG data.

Local exit polls over the weekend projected Prime Minister Narendra Modi and his Bharatiya Janata Party-led alliance were set for a rare third consecutive term in power.

The BJP-led National Democratic Alliance is expected to secure around 365 out of the 543 seats in the lower house of India’s parliament, according to local news channel NDTV’s exit poll summary. However, final results, expected on Tuesday, can diverge from exit poll projections.

Orange juice prices have climbed to fresh all-time highs amid persistent supply constraints, pushing the industry into crisis mode and forcing some makers to consider alternative fruits.

Prices of the breakfast staple have been climbing rapidly in recent years, partly driven by declining output in Florida — the main producer of orange juice in the U.S. — and climate-fueled extreme weather in the main orange producing areas of Brazil.

The South American agricultural powerhouse is the world’s largest producer and exporter of orange juice, which means it plays a hugely influential role in shaping the global industry.

The benchmark frozen concentrated orange juice futures, traded on the Intercontinental Exchange in New York, closed at $4.77 per pound on Wednesday. That’s nearly double the price registered a year ago.

The US mortality rate 736.3 deaths per 100K in 2023, marking a -7.8% YoY decline. While this drop is significant, the figure is still +3.0% above 2019. We are 3 years past the worst of C19, yet the death rate is no better than it was in 2012.

SUMMARY OF FED CHAIR POWELL'S STATEMENT:

1. Inflation has eased but remains too high

2. Further progress on inflation is not assured and path is uncertain

3. Inflation data this year has been higher than expected

4. Rate cuts not appropriate until "greater confidence" over inflation

5. Balance sheet reduction to be lowered by $35 billion per month

6. Rate cuts are likely to take longer than expected

Powell knows there's a long road ahead.

JEROME POWELL: UNLIKELY NEXT POLICY MOVE WILL BE A HIKE

TO HIKE RATES, WE'D HAVE TO SEE EVIDENCE THAT POLICY ISN'T SUFFICIENT TO BRING INFLATION BACK DOWN TO OUR GOAL
…

TO RATE CUTS, BUT THAT WOULD BE IF WE GAIN GREATER CONFIDENCE AND UNEXPECTED WEAKENING IN LABOR MARKET.

Asset manager BlackRock will launch an investment platform in Riyadh with the help of a $5 billion anchor investment from Saudi Arabia’s Public Investment Fund, the kingdom’s sovereign wealth fund.

The announcement Tuesday followed the signing of a memorandum of understanding between BlackRock’s Saudi division and the PIF with the aim of spurring capital markets growth in the oil-rich Gulf country.

BlackRock, the world’s largest asset manager with $10 trillion in assets under management, will “launch investment strategies across asset classes for the Saudi market, including both public and private markets, managed by a Riyadh-based investment team,” a joint press release from the firm and the PIF read.

The new platform will be called BlackRock Riyadh Investment Management, or BRIM.

BlackRock CEO Larry Fink said in a statement that the kingdom “has become an increasingly attractive destination for international investment as Vision 2030 comes to life.”

The US Federal Reserve is poised to maintain its policy rate within the 5.25%-5.50% range at the end of its two-day policy meeting this Wednesday, as enduring inflationary pressures and a labor market that remains taut indicate a stall in progress towards lowering inflation back to its 2% target this year.

Investors eagerly await insights from Chair Jerome Powell, hoping to gauge the impact, if any, of recent inflationary trends on the prospects of near-term interest rate cuts. Expectations have shifted, with investors now placing roughly even odds on a 25 basis point reduction at the September meeting. Moreover, the probability of no rate cuts from the current range has risen to approximately one in four, a notable shift from near-zero probabilities as recently as April.

Stagflationary ISM

- US ISM Manufacturing PMI Actual 49.2 (Forecast 50, Previous 50.3)

- US ISM Mfg. Prices Paid Actual 60.9 (Forecast 55.4, Previous 55.8)

- US ISM Mfg. Employment Index Actual 48.6 (Forecast 48.2, Previous 47.4)

- US ISM Mfg. New Orders Index Actual 49.1 (Forecast 51, Previous 51.4)

Iran is exporting more oil than at any time for the past six years, selling an average of 1.56 million barrels a day during the first three months of the year, almost all of it to China, per FT.

Trump Media shares opened trading Wednesday higher, breaking the $50 per share threshold for the first time in nearly a month.

Trump Media rose by more than 8% in early trading, before pulling back a bit.

US JOLTS JOB OPENINGS ACTUAL 8.488M (FORECAST 8.69M, PREVIOUS 8.756M)

Still 1.3 jobs offered for every unemployed and insured person seeking work.

CVS Pharmacy stock, , crashes 13% after posting a massive earnings miss and lowering guidance.

CVS' net income fell to $1.12 billion in Q1 2024, down from $2.14 billion in Q1 last year.

That's a near 50% DROP in their first quarter net income year-over-year.

CVS now expects 2024 EPS of at least $7.00, down from a previous guidance of at least $8.30 per share.

This comes just hours after Starbucks reported a horrible quarter with stock down 13%.

Mastercard Q1 FY24:

• Revenue +10% Y/Y to $6.3B ($10M beat).
• Operating margin 57% (+2pp Y/Y).
• Non-GAAP EPS $3.31 ($0.07 beat).

Fx neutral:
• Revenue +11% Y/Y.
• Gross dollar volume +10% Y/Y.
• Cross-border volume +18% Y/Y.
• Switched transactions +13% Y/Y.