- US stocks finish lower. Follow here.
- CNN Business and Moody's Analytics have partnered to create a proprietary Back-to-Normal Index. It shows which states are closest and furthest from returning to their pre-pandemic economy.
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%.
The economy is reopening. People are getting vaccinated. But believe it or not, we're still in a pandemic.
"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.
There's an ETF for that...
"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 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.
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.
So what happened?
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.
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.
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.
El Salvador has become the first country to adopt bitcoin as legal tender.
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.
Stocks ended mixed Tuesday following a rather quiet trading session. That trend is continuing early Wednesday.