TLDR

MARKET RECAP → The S&P 500 (VOO) and Nasdaq (QQQ) soared to new record highs on Wednesday, further enhancing their impressive 2024 gains, spurred by a U.S. consumer inflation report that came in below expectations. So far this year, the S&P 500 has notched its 23rd record close, with the Dow (DIA) at its 18th and the Nasdaq celebrating its eighth.

ECONOMIC PRESSURES PERSIST→ 📉 April's CPI rose just 0.3%, below forecasts, signaling a mild easing in inflation with mixed impacts across sectors, as stagnant retail sales and declining wages underscore ongoing economic pressures.

DIMON WARNS ON DEFICIT → 💼 JPMorgan (JPM) CEO Jamie Dimon urgently calls for U.S. action on its ballooning fiscal deficit to prevent severe economic repercussions like sustained high inflation and forced fiscal adjustments.

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TODAY’S TOP NEWS

Economic Pressures Persist

🌡️ Modest Inflation Increase: April saw consumer prices rise by 0.3%, a tad below expectations, signaling a slight easing in inflation. This marked the smallest monthly increase since December, with the annual rate aligning with predictions at 3.4%.

💸 Sector-Specific Changes: Shelter and energy were major drivers of the month's inflation, with shelter costs up 0.4% and energy prices rising 1.1%. Conversely, food prices remained flat, and vehicle prices declined, reflecting varied inflationary pressures across different sectors.

📉 Wage and Retail Sales Impact: Adjusted for inflation, workers' earnings dipped by 0.2% in April, compounding the squeeze on purchasing power. Retail sales disappointed with no change from the previous month, suggesting consumers are feeling the pinch of sustained price increases.

TODAY’S TOP NEWS

Dimon Warns On Deficit

💸 Urgent Call for Fiscal Responsibility: JPMorgan (JPM) CEO Jamie Dimon emphasized the critical need for the U.S. to address its growing fiscal deficit, which has soared to alarming levels. He warned that the current deficit, magnified by COVID-19 spending and tax cuts, poses a serious threat to the economy if not managed prudently.

📉 Economic Consequences Highlighted: Dimon pointed out that without action, the deficit could lead to more severe economic consequences, including persistent high inflation. He argued that proactive measures are necessary to avoid being forced into uncomfortable fiscal corrections by market pressures.

📊 Focus on Sustainable Growth: While acknowledging the challenges, Dimon expressed hope that the U.S. government would focus on reducing the deficit during a period of robust economic growth. He emphasized the importance of implementing policies that not only support current prosperity but also ensure long-term fiscal and economic health.

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