CNBC Daily Open: Back to reality

The Federal Reserve will use the consumer price index report to help determine their path ahead.

CNBC Daily Open: Back to reality

This report comes from CNBC Daily Open today, our international markets newsletter. CNBC Daily Open keeps investors informed about everything they need, regardless of where they may be. You like what you see? Subscribe here

All eyes are on inflation.

Here are some things you should know now

We are looking forward to the U.S. Consumer Price Index report later in the week. This will help us determine the Federal Reserve’s future direction. When minutes of the February Federal Open Market Committee meeting are published, we'll be able to hear more about Fed's thinking. The U.S. Labor Department reported Friday that March saw the addition of 236,000 jobs. This was in line with the expectations, but lower than the month before. It shows that the market for employment is indeed slowing. This compares to a revised February print of 326,000 jobs. The unemployment rate fell from 3.6% to 3.5%. Microsoft is placing a large bet on ChatGPT. According to reports, it has invested $13 billion in OpenAI as a partner. This would put the startup from San Francisco at $29 billion. Microsoft plans to integrate the technology of the startup into its Bing search engine and sales and marketing software. There is potential for tension between the U.S.A and China as a delegation met with industry leaders, including Disney CEO Bob Iger (and Apple CEO Tim Cook) after returning from China's business forum. PRO The S&P 500 started the second quarter worse off than it began the first quarter. It fell 0.1% in its first trading week while it gained 7.7% in January's initial week. These are the stocks that have the greatest upside when the second quarter begins.

The bottom line

We are glad to see you back after a long weekend. Investors deserved a break from recent headline-driven mania. It's time for investors to get back to reality. Market jitters will not go away anytime soon.

Because there are still many questions. The most important question is: When will the Fed's hike cycle come to an end? The U.S. jobs report last week could open the door to another rate increase in May, but it shows clear signs of a slowing economy. Many investors believe that rate cuts will be necessary this year due to last week's weak ADP manufacturing readings and weak ADP claims data. This is despite the fact that policymakers insist on denying that idea.

The U.S. consumer prices index will be released on Wednesday. Reuters polled economists and they expect an acceleration of 5.6% annually and a 0.4% monthly increase for core inflation. This excludes volatile food and energy. Inflation remains the Fed's greatest problem at these levels.

Although the dust seems to have settled in recent weeks' banking chaos, there is still potential for more drama. This means that financial stability will be an important part of the Fed's policy calculation. When the big banks open the U.S. earnings season, we'll likely see more information about the financial sector's health.

Investors are returning from the holidays feeling more relaxed with a positive start for Asian Futures. Asian stocks point to a mixed opening, while U.S. futures tick higher after the Good Friday stock market close. The majority of Europe will have a four-day weekend, and will remain closed on Easter Monday.