Energy's CPI Spike Hits Other Sectors, U.S. & Iran Ceasefire in Jeopardy

Ajouté : 2026-05-12

[00:00:00]Morning. Kevin Hanks [music] live at the CBOE for our pre-bell playbook. And good morning to you. First up, I know Trump is headed to China. We have a lot to discuss, but inflation is always uh number one when it comes out. So, let's hear some of the details on the CPI.

[00:00:16]Good morning, Kevin.

[00:00:18]>> Good morning, Nicole. Yes, headline inflation up 6 uh month over month.

[00:00:25]That's in line with expectations.

[00:00:28][snorts] head year-over-year headline CPI 3.8%.

[00:00:32]Th both of those levels are high, but they're both in line with consensus expectations. Now, we get to the core, the X food and energy level. Up.4, that's a tenth higher than expectations.

[00:00:47]And 2.8% is a tenth higher than expectations. And where was the dominant numbers in inflation? Of course, it's energy.

[00:00:57]Energy overall up 3.8%, energy commodities up 5.8%, gasoline up 5.4%, fuel oil up 5.8%. But there were other concerning parts of this as well. Food up.5, food at home up.7 [snorts] uh ten of a percent. New vehicles were up 2%. Apparel up6 shelter up6. Owner's equivalent rent and rent both up.5%.

[00:01:29]So if you notice, it's easier to pick out the categories that weren't up because mostly everything was up. Here's what wasn't up. New vehicles down 2/10.

[00:01:42]Medical care commodities down 4/10en of a percent. and and and utility pipe gas services down a tenth. Everything else, Nicole, was either unchanged or higher on the month. So inflation, much of it expected, uh is still high and and the and the core CPI number slightly higher than expected. That said, uh E- mini futures that sold off right when the number came out have rallied since then. They're only down a quarter of a percent. They were [snorts] down I saw 44% right when the number came out. So they they've actually rallied since this number came out, Nicole.

[00:02:23]>> Yeah, understood. I mean, and energy is no surprise there. But to see some of the other things such as food and um rent, you don't necessarily want to see heightened numbers there, right? I mean, and and you know, what does it mean and what does the Fed do next? And what are people betting on when it comes to what Kevin Wash may do over the next six months?

[00:02:44]Exactly right. We all knew that energy was going to be a bigger number, but the worry is that that will start creeping into other parts and food uh you know shelter uh uh you know food, shelter, apparel all higher. How about this? Airfares 2.8% higher. Motor vehicle insurance up a tenth. That that that was modest. But meat, poultry, fish and eggs up 1.3%.

[00:03:12]Beef up 2.7%, fruits and vegetables up 1.8%. So the energy we expected, but we're getting it in a lot of other places as well, Nicole.

[00:03:24]>> Yeah, understood. So, uh, the Iran war on life support, uh, what a phrase the president has chosen. You know, it was only last week we were feeling pretty excited that it may be coming to an end.

[00:03:37]You knew it's not always near the end.

[00:03:39]Yeah, you knew there's always a wild card, but on life support certainly is not reassuring, is it?

[00:03:44]>> Unbelievably, a a couple things. Number one, as we know, President Trump believes in pressure. So, he believes in hyperbole as he's putting pressure on countries like Iran in this case. That said, you're dealing with a pretty hostile uh adversary here who really has very little interest in number one helping their people or number two settling with the US and giving up you know the straight of Hormuse and the hope of nuclear bombs in the future. So there it's not surprising to me that this is not going smoothly. The only way that Iran will come to the table with a serious offer or a serious, you know, uh, deal is under extreme pressure from the United States. And maybe, I don't know for sure, I'm not there, but maybe we haven't reached that point yet.

[00:04:45]>> Understood. Um, last but not least, I mean, when we think about earnings thus far and all things AI, anything else uh, you want to add here?

[00:04:57]earnings are doing extremely well and so the earnings coming out have done you know what the the geopolitical risk and the commodity pressure that surrounds this market cannot overcome the strength in US earnings and what's going on with the AI revolution and as we get closer to Nvidia's earnings now out in 8 days 8 days to Nvidia's earning earnings. June 3rd will will get Broadcom's earnings.

[00:05:27]Kevin Walsh uh got through the closure vote yesterday, 49 to 44. Two Democrats actually voted with him. So it could the the the full Senate vote could come as early as tomorrow. Remember Jerome Pal's uh tenure as Fed chair expires on the 15th. So we're that's Friday. So we're looking for some deadlines there. But all things considered, Kevin Worsh making his way through the Senate vote.

[00:05:54]So all things considered, commodity or e- minis only down a quarter of a percent despite a an inflation number that was worse than expected. Nicole, >> all right, Kevin Hanks, great to see you there and thank you for all the details on the CPI this morning.