This morning’s stock markets will digest the inflation report for May 2024. In the afternoon, the Federal Reserve will announce its interest rate policy, which markets widely expect is no change. In the last month, markets priced in interest rate cuts at some point in time in 2024.
Energy inflation will matter the most in the CPI report. After prices fell, WTI crude prices quickly reversed from the bearishness. That would set up energy inflation re-igniting this month. Investors may buy Shell plc (SHEL), Exxon Mobil (XOM), and Chevron (CVX). Their share price is trading between 6% and 9% from their 52-week high.
Sustained energy prices would lead to a rebound back to 52-week highs in the coming weeks.
On the earnings front, Oracle posted weak quarterly results. It reversed after-hours selling pressure by announcing a deal with OpenAI. In the last quarter, Oracle earned $1.63 a share on $14.3 billion in revenue. Its cloud revenue of $5.3 billion did not meet expectations. Analysts expected the company to earn $1.65 a share.
The company signed a contract with OpenAI to use Oracle’s cloud infrastructure. This would extend Microsoft’s (MSFT) Azure AI Platform. In addition, it made a deal with Google (GOOGL) to create a multi-cloud partnership. As a result, Google Cloud will offer customers Oracle Cloud Infrastructure database services. Additionally, it will offer a high-speed network interconnect.
