U.S. CPI accelerates to 3.5 pct in March amid continued inflation pressure

U.S. CPI rose 3.5% YoY in March, higher than market expectations of 3.4%. Excluding volatile food and energy prices, the core CPI rose 3.8% YoY, compared to the previous value of 3.8% and the expectations of 3.7%, still the lowest level since May 2021. Shelter and energy costs drove the increase on CPI. The energy component increased by 1.1% MoM and 2.1% YoY, the first yearly rise since February 2023. The market expected energy prices to stay elevated in the near term, reducing consumer purchasing power. While shelter costs, which make up about one-third of the weighting in the CPI, were higher by 0.4% MoM and up 5.7% YoY. Food prices increased just 0.1% MoM and were up 2.2% YoY. The measure for meat, fish, poultry and eggs climbed 0.9%, pushed by a 4.6% jump in egg prices.

Butter fell 5% and cereal and bakery products declined by 0.9%. Dining out increased 0.3%. Used vehicle prices fell 1.1% and medical care services prices rose 0.6%. Clothing prices increased by 0.7% MoM, without evidence that this increase was due to supply chain issues. The market expected the price of goods to moderate in the upcoming quarters as consumer demand softens.In terms of US stock market, S&P 500 fell on Friday on anxiety over a potential escalation of conflict in the Middle East. The S&P 500 is still lacking upward momentum, and it is expected to fluctuate between 5,000-5,300 points.

In terms of industry, The OPEC+ production cuts and the geopolitical tensions drove oil prices. Investors could continue to pay attention to related companies.

British Petroleum (BP.US) reported a revenue of US$213 billion in FY23, a YoY decrease of 14%. The net profit stood at US$15 billion, marking a turnaround from a net loss of US$2.5 billion in FY22. The adjusted EBITDA reached US$43.7 billion. In the Bioenergy sector, biofuels production increased by 18% YoY, and the Biogas supply volumes grew by 80%, reflecting the continued investment in sustainable energy. In the EV charging business, the company achieved 150% YoY growth in energy sales by increasing the number of EV charge points and increasing utilisation.

Upstream production grew by 2.6%. The company started-up four major projects that is expected to contribute more than 50% towards its target of 200 million barrels-of-oil-equivalent per day by 2025. The LNG supply portfolio grew by over 20% to approximately 23 million tons per annum, mainly due to the Coral and Freeport. Additionally, the company accessed 44 additional exploration blocks in Gulf of Mexico, Canada, Brazil and Deep Water Trinidad. It is recommended to buy at US$38.50, target at US$44.50, and stop loss at US$36.50.

Exxon Mobil Corporation (XOM.US) delivered an industry-leading 2023 earnings of US$36.0 billion, due to favorable derivative mark-to-market impacts, improved volume and mix driven by quality Guyana and Permian assets. In terms of products, the earning of Energy Products was US$12.1 billion, a decrease of US$2.8 billion YoY due to the decline in industry refining margins, and higher planned maintenance activities. The earning of Chemical Products was US$1.6 billion in FY23. The earning of Specialty Products amounted to US$2.7 billion, an increase of US$299 million YoY as product differentiation and brand strength drove sustained business performance.

Guyana and Permian production increased by 18% YoY and achieved record annual refinery throughput in FY23. Refining throughput in FY23 stood at 4.1 million barrels per day, up 38,000 barrels per day YoY, supported by the completion of the 250,000 barrels per day Beaumont refinery expansion in the first quarter of 2023. While upstream net production was flat compared to the same quarter last year. Excluding the impacts from divestments and government-mandated curtailments, upstream net production grew about 70,000 oil-equivalent barrels per day. It is recommended to buy at US$117.0, target at US$136.0, and stop loss at US$112.0.