US stocks look ahead to key inflation report

By CNN Business

Updated 6:08 p.m. ET, June 9, 2021
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4:02 p.m. ET, June 9, 2021

Stocks finish lower

From CNN Business' Anneken Tappe

US stocks ended modestly lower on Wednesday following another quiet trading session. Investors are now looking ahead to tomorrow’s May inflation report.

Elsewhere, inflation worries seem to have abated in the bond market, where the 10-year US Treasury bond yield fell to a three-month low. At the time of the close, the government bond yielded about 1.49%.

1:17 p.m. ET, June 9, 2021

What to invest in after the pandemic

From CNN Business' Anneken Tappe

The economy is reopening. People are getting vaccinated. But believe it or not, we're still in a pandemic.

The phase we're in now -- emergence and normalization -- "will take much longer than people think," said Davin Bailin, chief investment officer at Citi Private Bank (C) on the CNN Business digital live show Markets Now.

"We're in a distorted economy," he told Alison Kosik on the show.

Bailin believes it will take another six to nine months until the pandemic is declared over. And once the economy, as well as markets, have normalized, the next phase will be the beginning of a new economy cycle.

So how should investors position for that?

It's about finding companies with sustainable business, Bailin said. The trends that the pandemic exacerbated won't disappear, such as digitization, which affects everything from how we work to how information flows. Players in those fields are a good starting point for getting ready for the post-pandemic economy.

1:05 p.m. ET, June 9, 2021

Got investing FOMO?

From CNN Business' Anneken Tappe

There's an ETF for that...

Tuttle Capital Management's FOMO ETF is designed to keep investors from missing out on opportunities in the market.

"People have been really gravitating towards thematic ETFs," said the firm's CEO and chief investment officer Matthew Tuttle. But the ETFs currently available are "problematic" and don't rebalance very often, he said.

"We rebalance on a weekly basis so we can stay in harmony with what's going on in the market," Tuttle said.

The fund is mostly in value stocks at the moment, reflecting the reopening of the economy, but it also has small holdings left in meme stocks like AMC (AMC) and Gamestop (GME). The fund also used to own cryptocurrencies, but sold its holdings on Monday, Tuttle said.

1:00 p.m. ET, June 9, 2021

All about inflation

From CNN Business' Anneken Tappe

The next few days, as well as next week, will be all about inflation.

May consumer price inflation data will be reported tomorrow morning and the Federal Reserve, which manages inflation as per its mandates, meets next week. Prices have been rising, but the Fed has been stressing that the pressures are just temporary.

"From the Fed's point of view the recovery is still far from complete," said Lindsey Piegza, chief economist at Stifel. That's why policymakers aren't feeling like they need to change their tune yet.

That said, some Fed officials have signaled that they're ready to start talking about how the central bank might change its policies in the future. Tapering asset purchases will likely be more of a 2022 event, Piegza said.

"My concern is that right now we are seeing price pressure more than double the Fed's target," she added.

Even though that might level out over the summer, the wide-spread price pressure could force this conversation to happen earlier.

If prices continue to rise, it could be a "sharp pinch on our wallets," she added.

10:58 a.m. ET, June 9, 2021

10-year Treasury yield falls to lowest level since March

From CNN Business' Anneken Tappe

Remember when Treasury yields were rising rapidly on the back of inflation fears? Well, the worries about price increases are still around in principle — but Treasury yields look really different.

The 10-year US government bond yield slipped below 1.5% today, marking its lowest level since early March.

So what happened?

Economists predicted prices would rise when the economy reopens. As far as we can tell, that has proven correct. But there were worries that an inflation spike could force the Federal Reserve to change its monetary policy stance from the currently ultra-low interest rates and billions in monthly asset purchases. That pushed Treasury yields higher, because they track future interest rate expectations.

But here's what changed things recently:

"The May jobs report was on the weaker side of expectations which all else equal would imply a later taper of Fed asset purchases," said economists at Citi (C) in a note to clients.

The May jobs report was the second report in a row that underperformed expectations by quite a bit.

That said, central bank officials have recently seemed more open to discussing the eventual tapering of monthly purchases, and shortages of materials, as well as workers, are only adding to inflationary pressures, the Citi economists said.

Sounds like a wait and see game.

The next Fed monetary policy update is scheduled for next Wednesday.

9:31 a.m. ET, June 9, 2021

Stocks inch higher

From CNN Business' Anneken Tappe

Major US stock indexes opened slightly higher on Wednesday.

With little on the economic calendar, investors are looking ahead to Thursday’s consumer price inflation numbers, which are expected to show inflation continues to creep higher.

  • The Dow opened 0.1%, or 19 points, higher.
  • The S&P 500 rose 0.2%. The index fell just short of a new record yesterday, but it could make up the remaining ground today.
  • The Nasdaq Composite opened up 0.4%.
9:14 a.m. ET, June 9, 2021

The quiet before the inflation data

From CNN Business' Anneken Tappe

There's not much on the economic calendar today, and that's probably for the best: Investors are anxiously awaiting tomorrow morning's inflation data, which promises to show prices kept rising in May.

Economists polled by Refinitiv predict consumer prices rose 4.7% in the 12 months ended in May. That would be the biggest jump since summer 2008. Stripping out volatile energy and food prices, the forecast drops to 3.4% over the same period.

In May alone, prices are expected to have risen 0.4%.

The Bureau of Labor Statistics will release the consumer price index (CPI) data at 8:30 am ET tomorrow. At the same time, the Labor Department will publish its weekly report on jobless claims. First-time claims for unemployment benefits are expected to fall to a new pandemic-era low of 370,000.

7:09 a.m. ET, June 9, 2021

El Salvador is the first country to adopt bitcoin as legal tender

From CNN Business' Charles Riley, Mitchell McCluskey and David Goldman

El Salvador has become the first country to adopt bitcoin as legal tender.

A majority of lawmakers have approved a proposal from Salvadorian President Nayib Bukele that will allow bitcoin to be used as legal tender in the country alongside the US dollar.

The law states that "all economic agents shall accept bitcoin as a form of payment when it is offered by the purchaser of a good or service." It also says that tax payments can now be made in bitcoin.

Bukele, 39, is a right-wing populist who rose to power in 2019. He previously said that El Salvador would partner with digital finance company Strike to establish the infrastructure required to support the use of bitcoin as an official currency.

Read more here.

6:20 a.m. ET, June 9, 2021

US stock futures point to mixed opening

Stocks ended mixed Tuesday following a rather quiet trading session. That trend is continuing early Wednesday.

Here's where things stand as of 6:45 am ET: