The upcoming release of the U.S. consumer price index (CPI) inflation report for May on Wednesday, June 12th, has the investment community on edge. Inflation, a constant specter over the last couple of years, has grown to become a critical concern for market participants.
This report goes beyond merely assessing current inflation levels; it serves as a forecast into the future trajectory of inflation. Investors eagerly await this CPI reading, as it could determine the possibility of substantial rate cuts in the near future or a more hawkish stance from the Federal Reserve.
The implications of these inflation metrics are far-reaching, not just influencing monetary policy but potentially shaping the overall economic landscape. In the event of a “hot” CPI report that forces the Federal Reserve’s hand in delaying rate cuts, the economy could find itself grappling with the unwelcome scenario of stagflation. This apprehension is compounded by disappointing Q1 GDP growth figures, setting the stage for a potentially volatile market environment, particularly in an election year.
With the looming impacts of the inflation report, here are three noteworthy stocks that warrant close observation in light of the imminent economic data.
Tesla (TSLA)
Tesla (NASDAQ:TSLA) recently disclosed disappointing Q1 2024 results, missing both top and bottom-line projections. The current macroeconomic setting poses increasing risks for TSLA stock, with global pressures on EV adoption and concerns about premium vehicle demand amidst elevated interest rates.
While Tesla’s energy storage segment saw record profitability in Q1, the stock’s volatility is likely to persist until interest rate uncertainties stabilize. Despite the undeniable long-term promise of Tesla’s EV focus, market turbulence could offer a rough ride to investors in the interim.
Boeing (BA)
Boeing (NYSE:BA) has weathered substantial scrutiny recently due to issues surrounding its 737 Max aircraft maintenance challenges. Noteworthy quarterly results and key strategic decisions following the Alaska Airlines incident paint a mixed picture for BA stock.
The potential for rate cuts could present a significant opportunity for Boeing, especially given its substantial debt burden. However, a hotter-than-expected inflation report could elevate near-term pressure on BA stock, underscoring the importance of monitoring this stock closely ahead of the impending economic data release.
Coinbase (COIN)
Coinbase (NASDAQ:COIN) operates a prominent cryptocurrency exchange platform, rendering its stock among the most volatile investment options linked directly to the crypto market’s performance. The firm’s revenue and profitability are intricately tied to the fluctuations in the crypto sector.
Notably, Coinbase reported robust Q1 results, surpassing expectations across various financial metrics. The company’s fortunes hinge on the performance of the crypto market, making it a high-risk proposition that could swing significantly based on the upcoming inflation report.
Given Coinbase’s sensitivity to crypto market dynamics, this stock stands out as a pivotal player to track closely leading up to the CPI data release. The impending inflation report could pivot the company’s recent momentum in either direction, making it a critical watch in the current economic climate.
More From InvestorPlace
The significance of the impending inflation report cannot be overstated, with investors eagerly awaiting the potential impacts on these key stocks in the market.