The Closing Look

Stocks ended lower on Tuesday as investors continue to digest the latest round of economic and earnings data. On the economic front, the consumer price index (CPI) rose to 0.4%, beating estimates for 0.3%. That was the highest increase since 2013 and was the first real sign that inflation may be increasing. If inflation accelerates from here, that may put pressure on the Fed to raise rates at some distant point in the future. A separate report showed that housing starts picked up at a moderate pace in April and rose to 1.172M, beating estimates for 1.135M. Meanwhile, earnings failed to impress as Home Depot (HD) fell after reporting Q1 results.

Gary’s Thoughts: Ick! Not sure it is good news when market bounces back and forth 200 points each day. Not a good day technically. Even the Transports, which were up 160, finished only up in the 40s. And do not believe any noise about good economy. And really do not believe a fedhead coming out saying they will raise rates 3 times this year. No chance.