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U.S. inflation numbers, fizzling meme stock rally



The latest U.S. inflation numbers offer a glimmer of hope for those eyeing a rate cut. The core inflation rate fell to its lowest in three years, matching expectations at 0.3% for the month. The overall inflation rate was slightly below expectations at 0.4%. Annually, the inflation rate is now 3.4%, with the core rate slightly higher at 3.6%. While this is still above the target preferred by U.S. Federal Reserve Chair Jay Powell, it marks a significant decrease. Consequently, the odds of a rate cut are increasing for both June and July.


In other news, the recent surge in meme stocks appears to be fizzling out. After more than doubling since Monday, stocks like GameStop and AMC saw premarket declines on Wednesday morning. Despite the volatility, AMC seized the opportunity to issue over 72 million shares at $3.45 each, raising $164 million to reduce its debt. This comes after a remarkable rise in its share price from $2.91 last week to over $6 currently. Retail investors are driving these fluctuations, creating substantial losses for short sellers, with GameStop short positions down $1.3 billion and AMC $126 million so far this month.


Meanwhile, the price of copper is nearing its all-time high, driven by supply and demand dynamics as well as a short squeeze. The price spike is particularly pronounced in New York, causing some physical shipments to divert from other regions. Traders struggling to exit short positions are fueling this surge, reminiscent of the 2021 oil market crash.


In Canada, the wildfire situation near Fort McMurray, Alberta, is worsening. An 11,000-hectare blaze is advancing towards the city, now just eight kilometres from the landfill. Thick smoke is hampering precise tracking, and firefighters are facing tough conditions. The fire is not close to major oil sands mines but is near Athabasca Oil Corp.'s well site and several key pipelines.


Lastly, the Canadian Real Estate Association will release April's housing data today. The market remains in a stalemate, with sellers waiting for prices to rebound and buyers holding off due to high borrowing rates. The market's next move remains uncertain.


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