CPI Release Spurs A-Share Rally; ChiNext Soars 8.3% in 2 Days; US Inflation Fears Persist

Today, the National Bureau of Statistics released the latest CPI and PPI data for April, prompting a significant surge in the A-share market. The ChiNext Index has already risen by 4.3%, demonstrating a completely independent trend from the US stock market.

Tonight, the United States will also announce its latest CPI data, which is very likely to remain at a high level, indicating that inflation in the US is still difficult to curb.

01. CPI

The newly released data shows that China's Consumer Price Index (CPI) rose by 2.1% year-on-year and by 0.4% month-on-month.

Since the beginning of this year, the CPI data has been at a low level, with both January and February's CPI at 0.9. There was an increase in March, reaching 1.5, and a further rise in April to 2.1. Even so, the inflation data is still at a relatively moderate level, slightly lower than last year's peak.

Last year's November CPI data set the highest value for the year at 2.3. Currently, April's CPI at 2.1 is still a bit lower than the November figure.

In the year-on-year increase of April's CPI, food prices rose by 1.9%, and non-food prices rose by 2.2%.

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That is to say, our situation is completely different from that of the United States. The high CPI in the US is mainly due to the rise in energy prices, followed by the increase in food prices. Recently, the US CPI data showed that food prices have risen by more than 8.8%, while our food prices have only increased by 1.9%.

A few years ago, when China's CPI was relatively high, a significant factor was the sharp increase in pork prices. However, looking at the year-on-year data recently, pork prices have decreased by 33.3%. It is this key factor that has led to a relatively low increase in our food prices.

Nevertheless, compared to March, the current decline in pork prices has moderated. In March, the year-on-year decrease in pork prices was 41.4%.In non-food items, the rise in energy prices is a key driving factor. The increase in gasoline and diesel prices ranges from 29% to 32%, and the price increase for liquefied petroleum gas has also reached 27%. This is very close to the situation in the United States, after all, the rise in energy prices is global.

02, PPI

The Producer Price Index for industrial production increased by 8% year-on-year, showing a continuous decline.

Last October, this figure reached its peak of 13.5. Since then, it has been declining for the past six months, with the fastest decline occurring from November of last year to January of this year. Subsequently, in February, March, and April, it continued to decline, but the rate of decline slowed down, and in April, there was even a month-on-month increase of 0.6%.

Over the past year, PPI has been operating at a high level, but CPI is not high, and this scissors difference has led to a reduction in profits for many enterprises.

The price of raw material supplies continues to rise. However, it has not been passed on to consumers, so the increase in CPI is not high. For ordinary families, this is undoubtedly good news because the inflation that worries countries around the world has not been reflected in us, and everyone feels that the rise in daily prices is not significant.

But for the enterprise side, there is a bitter speech, the cost of goods increases, but the terminal selling price does not increase significantly, continuously compressing the profit space of enterprises.

However, with the continuous decline of PPI, it will effectively help to increase enterprise profits.

In A shares, today's strong rise is the best response to this data release. As of the midday break, the ChiNext index has risen by 4.27%.

Starting from yesterday's opening of 2192, it has risen by 8.3% in just one and a half trading days.3, United States

The United States will release its CPI data on Wednesday evening, followed by PPI data on Thursday evening. Currently, the market's predictions for the latest CPI data are highly inconsistent.

This is because last week, after raising interest rates, the Federal Reserve Chairman claimed that future rate hikes would not reach 75 basis points or more. As a result, many predict that the Fed may have seen signs of a slowdown in future inflation data.

Therefore, the most optimistic forecast now is that CPI could fall from the previous 8.5% to 8.1%. If this is the case, it would be the first step in the decline of CPI data from high levels, and the market even predicts that CPI could drop to 7% by July.

The biggest factor currently driving up the U.S. CPI is the rise in energy prices. The slight decline in the increase of gasoline and diesel prices in April will help to lower the inflation rate. However, on the other hand, the price of natural gas has risen significantly year-on-year, which may just offset the slowdown in the increase of gasoline and diesel prices.

Nevertheless, due to the rise in labor costs, transportation costs, etc., food prices may continue to rise.

Taking these factors into consideration, the CPI announced tonight may not necessarily decline, and it could continue to reach new highs.