💴 Inflation Reports Satisfactory

Good morning investors! Oracle hit new highs and kept the market climbing.

Today we cover:

• Inflation numbers come in satisfactory

• Boeing crash!

• Why tariffs haven’t caused inflation

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📊 Economy and News 

U.S. Wholesale Inflation Softens, Hints at Dovish Fed

U.S. wholesale inflation rose less than expected in May, with the Producer Price Index (PPI) up 0.1%, below the forecasted 0.2%.

Core PPI, excluding food and energy, also rose 0.1%, missing the 0.3% estimate. Goods prices edged up 0.2%, with food slightly higher and energy flat, while jet fuel fell 8.2%. Services saw a 0.1% rise, driven by a 0.4% increase in trade margins, tempered by a 1.1% drop in airline fares.

The annual core PPI held at 2.7%, within the Fed’s target, while unprocessed goods dropped 1.6%, led by an 18.7% plunge in natural gas.

The data suggests easing price pressures, supporting a dovish Fed outlook. Expect a weaker U.S. dollar and a boost for equities, especially in tech and real estate, with lower Treasury yields likely.

President Donald Trump called Federal Reserve Chair Jerome Powell a “numbskull” as he demanded an interest-rate cut.

Trump claimed at the White House that lowering rates by two percentage points would save the U.S. $600 billion per year, but as he said, “we can’t get this guy to do it.”

Trump said he “may have to force something” if inflation is trending down and Powell does not lower interest rates.

Global hits:

• Chime opens at $43 in Nasdaq debut after pricing IPO above expected range.

• US says China’s Huawei can’t make more than 200,000 AI chips in 2025.

• US House passes Trump cuts of $9.4 billion for foreign aid, broadcasting as Trump prepares to issue immigration order to address farm, hotel labor issues.

Inflation news: Argentina inflation cools in May to lowest in over five years. Similarly, India’s inflation falls to 2.82% in May in longest run below target in 6 years. But things aren’t looking good for the US with Yellen expecting Trump’s tariffs to hike inflation to 3% year over year.

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📈 Stocks

S&P 500 6,045.26 (+0.38%)
DJIA 42,967.62 (+0.24%)
NASDAQ 19,662.48 (+0.24%)
BRENT CRUDE 70.31 (+0.77%)
* Prices as of Jun 13th, 12:20 AM UTC

Boeing Faces Scrutiny After Air India 787 Crash: What It Means for Investors

The tragic crash of an Air India Boeing 787-8 in Ahmedabad casts a shadow over Boeing as new CEO Kelly Ortberg navigates ongoing safety and production challenges.

While the 11-year-old aircraft’s history shows no immediate red flags (41,000 flight hours, per Cirium), the incident amplifies public skepticism following Boeing’s 737 MAX crises and a 2024 door plug incident. 

With Boeing shares down 4.2% and the Paris Air Show looming (June 16-22), Ortberg faces pressure to reassure investors and rebuild trust.

Aviation experts, including John Nance, suggest the crash is unlikely tied to manufacturing defects, but public perception could weigh on Boeing’s stock. Suppliers like Spirit AeroSystems (SPR.N) and GE Aerospace (GE.N) also saw declines, reflecting sector-wide ripples.

India’s Aircraft Accident Investigation Bureau, with U.S. NTSB support, will probe the cause, which may take months to determine.

Enhanced scrutiny on Boeing’s quality control could delay production ramps, though analysts like Edward Jones’ Jeff Windau see no long-term production hit.

Boeing’s recent 300+ orders signal resilience, but near-term volatility may persist.

Adobe earning: Adobe reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 10.6% year on year to $5.87 billion. Guidance for next quarter’s revenue was better than expected at $5.9 billion at the midpoint, 0.7% above analysts’ estimates. Its non-GAAP profit of $5.06 per share was 1.7% above analysts’ consensus estimates. Still, the stock fell 1% after the bell.

💵 Personal Finance

Why Tariffs Haven’t Spiked Inflation—Yet

Despite fears, President Trump’s tariffs haven’t driven inflation, with May’s consumer and producer price indexes rising just 0.1% (BLS data). Three reasons why:

1. Pre-tariff stockpiling: Companies hoarded goods before the April 2 tariff announcement.

2. Delayed impact: Tariff costs take time to filter into the economy.

3. Weak pricing power: Consumer spending cuts limit companies’ ability to raise prices.

What’s next? Isolated price hikes (e.g., canned goods +1.9%, appliances +4.3%) hint at future pressures. Economists like Nomura’s Aichi Amemiya expect tariff effects to emerge soon, but consumer weakness could keep inflation in check. The Fed may hold rates until September, watching for persistent price shifts.

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