Disinflation signals and market rotation
Key Questions
What were the June PPI results and what do they indicate?
June PPI came in at 5.5% versus the 6.2% estimate with downward revisions, signaling disinflation while Cleveland Fed nowcasts show headline inflation rolling over but core remaining firm.
How might the bond selloff impact AI stocks?
Rising yields from the bond selloff, alongside the Hormuz crisis, threaten to derail the AI stock frenzy as markets rotate from tech toward cyclicals amid earnings and geopolitical factors.
What did the latest UMich consumer sentiment survey reveal?
The UMich US sentiment survey came in better than expected as the fall in energy costs boosted consumer confidence.
June PPI came in well below expectations (5.5% vs 6.2% est.) with downward revisions. Cleveland Fed nowcasts show headline inflation rolling over but core firm. Fed official signals persistent inflation above target. A new article warns that a bond selloff threatens to knock the AI stock frenzy off course, with rising yields and the Hormuz crisis as catalysts. Markets are rotating from AI/tech to cyclicals amid earnings and geopolitical desensitization.