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Pre-market inventory: consumer prices continue to rise.  Where does it end?


What’s happening: Wall Street is focusing its attention on the Consumer Price Index for May, which will arrive on Thursday. The report is expected to show that prices excluding food and energy continued to post solid gains last month, up 3.4% from the previous year.

Including food and energy, economists estimate that consumer prices have jumped 4.7% in the past 12 months. It would be the biggest jump since the summer of 2008.

Traders fear that inflation could force central banks to withdraw support for the economy sooner than they would otherwise wish, hampering the fragile global recovery.

For now, assurances from policymakers, who have maintained that the price increases are temporary, appear to be working.

“I doubt the [Federal Reserve] will be scared and I doubt the markets will be unless we get the core well above [3.5%]Societe Generale strategist Kit Juckes said in a research note Thursday, referring to reading inflation without gas or food.

China’s central bank governor Yi Gang told Shanghai on Thursday that “price levels are generally under control and the People’s Bank of China should” implement normal monetary policy. “

The European Central Bank, which met in Frankfurt on Thursday, did not change its policy, issuing a statement that was essentially unchanged from its April decision. Investors will pay close attention to comments on inflation from ECB President Christine Lagarde during a press conference.

“We expect the ECB to avoid any discussion of the stall,” Dutch bank ING told clients, referring to discussions about when the central bank will slow down asset purchases, an important part of its stimulus program.

But a growing number of voices insist that policymakers – who are faced with a difficult set of choices – must recognize the risks of waiting too long to act, which could make their drug harder to swallow.

“The policy is to balance risks and these have moved rapidly, significantly and decisively in an upward direction since the start of the year,” wrote Andy Haldane, chief economist at the Bank of England , in a column published by the New Statesman this week. “This makes it a dangerous time, not only for central bankers but for the economy at large.”

The only market action comes from meme stocks.

US stocks remain stuck in limbo, with the S&P 500 only rising 0.4% this month.

This makes the huge swings in stocks popular with investors on social media even more dramatic.

The last stock to skyrocket is Clean energy fuels (CLNE), which climbed 32% on Wednesday. Shares rose another 6% in pre-market trading on Thursday.

But the momentum may fade for other names.

Earlier this week, traders coordinating on Reddit focused on healthcare company Clover Health and fast food chain Wendy’s. Clover Health gained 118% on Monday and Tuesday before falling 24% on Wednesday. Wendy’s (MAGNIFYING GLASS), which jumped 26% on Tuesday, lost 13% in yesterday’s session.

Shares of the Wish e-commerce platform fell 9% on Wednesday after climbing 50% on Tuesday.

On the radar: So far, Wall Street is not worried about a “spillover into larger markets,” according to Maneesh Deshpande, equity derivatives strategist at Barclays.

Since the phenomenon of memes stocks emerged earlier this year, professional investors have become familiar with Reddit’s playbook, which often involves targeting heavily short stocks, Deshpande said.

Short sellers borrow shares of a stock and sell it, hoping to buy it back at a lower price and make money on the difference. But if the price rises significantly, investors are forced to buy back to limit their losses, which further fuels a rally. This is called a “little pressure”.

“Many investors have likely followed these names and built the risk of another short squeeze into their investment process,” Deshpande wrote in a note to clients on Wednesday.

There is also evidence that regulators are watching closely. GameStop (GME) – the original meme stock – said on Wednesday it received a request from the Securities and Exchange Commission last month to provide documents and information for an investigation into the trading of its shares.

The high cost of fighting cyber attacks

Tackling a hack that cripples business operations is not a cheap deal.

JBS USA, the meat supplier whose entire U.S. beef processing operation was shut down last week by a cyber attack, has revealed that it paid a ransom of $ 11 million in response to the breach.

The ransom was paid after most of the company’s facilities were brought back into service.

“It was a very difficult decision for our company and for me personally,” CEO Andre Nogueira said in a statement. “However, we felt that this decision should be taken to avoid any potential risk to our customers.”

The revelation is a reminder of the exorbitant cost of dealing with cyber threats following a series of high-profile attacks. Colonial Pipeline, which suffered a hack last month, also paid the hackers a ransom. (The US Department of Justice said it recovered $ 2.3 million from the payment earlier this week.)

Watch this space: The average cost of a ransomware attack has doubled this year, according to UK security firm Sophos, from $ 761,106 in 2020 to $ 1.85 million in 2021. This includes insurance, business losses, cleaning and any ransomware payments.

The situation only appears to be getting worse as businesses and governments scramble to respond. “It happens all the time,” Energy Secretary Jennifer Granholm told CNN’s Jake Tapper on Sunday.

following

soft (CHWY) and Dave & Buster’s (TO PLAY) publish the results after the US markets close.

Also today: The US Consumer Price Index, a closely watched inflation indicator, is released at 8:30 a.m. ET, along with the first jobless claims from last week.

Coming tomorrow: The Group of Seven world leaders meeting kicks off in Cornwall, England.

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