Early Morning Call: Supermarket price inflation slows in June, food inflation still up YoY

On Monday, the stock market in the United States experienced a decline, primarily driven by the decrease in value of technology stocks. Companies such as Amazon, Nvidia, and Meta saw their stock prices drop by more than 3%. Among the companies that fared the worst was Tesla, which faced a downgrade to a neutral rating by Goldman Sachs.

A global consultancy company called AlixPartners has recently published its 2023 worldwide automotive forecast. According to the report, the automobile sector needs to make significant changes in order to effectively compete against Chinese competitors. The report suggests that Chinese brands are on the verge of dominating and revolutionizing the global automotive industry in the near future.

In the previous week, the Bank of England (BOE) surprised investors by increasing interest rates by 50 basis points, bringing the main rate to 5%. The reasoning behind this decision was straightforward: Britain is dealing with persistently high inflation that will take longer to decrease. Following this development, Reuters conducted a survey, and the majority of economists now believe that the Bank of England will implement an additional 50 basis points increase within the next three months. This increase will likely occur in two smaller hikes of 25 basis points each during the August and September meetings. In a previous survey conducted only two weeks ago, policymakers were expected to maintain the interest rate at 5.00% in the following quarter.

Canada's CPI Report

In Canada, it is anticipated that there will be a 3.4% surge in the consumer price index (CPI) during the month of May when compared to the same period last year. This comes after a 4.4% upturn in April. Furthermore, there is a prediction that core CPI will slow down to 3.9%. Although this figure is higher than the overall inflation rate, it indicates that it is taking longer for inflation on a wider scale to decrease. This particular matter is causing concern for the Bank of Canada.

During their recent gathering, Tiff Macklem's group made a surprising decision to increase the overnight rate target by 25 basis points, now standing at 4.75%. This unexpected move was driven by policymakers' worries about the possibility of inflation significantly surpassing the set 2% objective. In response to this concern, they pledged to closely monitor the behavior of core inflation.

Can Carnival Cruise Line's stocks bounce back on the London stock exchange tomorrow? Cruise line companies saw a decrease in their value yesterday when Carnival predicted that their third-quarter profits would be significantly lower than projected. These unexpected disappointments are not a result of a decrease in customer demand, but rather due to higher-than-anticipated inflation. The company's cost outlook has been raised due to increased expenses related to port operations, shipping, employee travel, and higher labor costs. Norwegian Cruise Line's shares dropped by as much as 6.4% during this time. However, Carnival's stocks in the US did not end the day at their lowest point and Royal Caribbean Cruises also experienced a recovery.

Walgreens Boots Alliance is set to announce its financial performance for the quarter before the stock market begins trading. Analysts predict that the company will generate earnings of $1.07 for each share and revenue totaling $34.2 billion. Shareholders are eagerly anticipating news regarding the future plans for Boots, which has been a topic of discussion since it was revealed three months ago that investors and board members were advocating for a split of the company's worldwide pharmacy operations in order to concentrate on its domestic market. Throughout its existence, Boots has had various owners.

The establishment came into existence in the year 1849 and has been affiliated with Walgreens since 2012. This would mark the second attempt by Walgreens to vend the British chain. Approximately a year and a half ago, they sought a buyer with a hefty price tag of $7 billion; however, they ultimately canceled the sale in June of the following year due to the inability to locate a fitting purchaser.