There is business optimism… Or should we say faith?

1️⃣ March CPI: When filling up your tank is an extreme sport

Monthly inflation jumped 0.9%, bringing the annual rate to 3.3%. If youu0027re wondering why your wallet is crying, the blame lies mainly with energy, which rose 10.9% in just one month due to the conflict with Iran. 😮u200d💨

Basically, inflation has been like that guest who says theyu0027re leaving, but ends up sleeping on your couch and eating everything in the fridge.

💡 What you need to know: Core inflation (excluding food and energy) remained at 0.2%, meaning the real problem is geopolitical and energy-related, not necessarily an overheating of the entire economy.

2️⃣ Fed Minutes: Patience is running out…

Even though we are still expecting interest rate cuts this year, some Fed members mentioned the possibility of raising rates if energy inflation leaks into the rest of the economy, or at least thatu0027s what was revealed in the Minutes of the Federal Reserveu0027s March meeting. 🤷u200d♀️🤷u200d♂️ 

Jerome Powell is in that uncomfortable position of wanting to be the nice guy who lowers rates, but the market is forcing him to act like the school principal who cancels recess.

💡 What you need to know: The market is shifting from betting on when they will lower rates to praying they donu0027t raise them. Uncertainty remains the standard.

3️⃣ The Blockade of Hormuz and Oil

War tensions between the US and Iran reached another critical point. Despite rumors of a truce, the Strait of Hormuz (through which much of the worldu0027s oil passes) remains under threat of tolls or closures. This is what keeps the price of a barrel at high levels.

It is not yet at global recessionary risk levels, but it is at inflationary concern levels (which doesnu0027t help the previous point either).

💡 What you need to know: As long as the Strait of Hormuz is a war zone, gasoline will remain the main driver of inflation in the United States, no matter what the Fed does.

4️⃣ Consumers with Financial Depression

Consumer confidence in the United States fell to a historic low this week. The perception of their current financial situation reached its worst level since 2009.

Basically, the average American has the same economic optimism as a Titanic passenger watching the ship sink. 🚢

💡 What you need to know: Consumption represents two-thirds of the United States economy; if people stop spending due to fear or lack of money, the risk of a recession increases significantly.

5️⃣ Q1 Earnings: Faith in Technology

Despite the chaos, more than 54% of Su0026P 500 companies that issued Q1 guidance are optimistic. The technology sector, driven by Artificial Intelligence, leads earnings expectations.

Although this hasnu0027t convinced many, CEOs indeed expect AI not just to generate videos of unfaithful fruits, but financial miracles.

💡 What you need to know: Next week officially begins the earnings report season. Technology companies are under pressure, and if they donu0027t meet expectations, the market could face a very hard landing.