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Two recent inflation reports indicated that overall pricing pressures have retreated from peaks in 2022. But both also signaled that inflation remains above the Fed's target of 2.0%. According to the latest Consumer Price Index (CPI) report, the overall inflation rate in January of 3.2% was higher than the prior month's 3.1%. That sour news was offset a bit by a drop in the core CPI rate, which excludes food and energy and eased to 3.8% from 3.9%. Two main factors are propping up CPI: Transportation Services (+9.9% YOY) and Shelter (+5.7%). These categories have prices that don't fall sharply. The other inflation report was the Producer Price Index (PPI), which measures pricing trends farther up the supply chain, at the manufacturing level. Here, we also saw a modest pick-up. The core final demand PPI rate for February was 1.6%, up 60 basis points month-over-month after having fallen from 4.4% a year ago. We have noted for months that making progress on inflation will be hard -- and nothing was overly alarming about either of the reports. Energy prices remain relatively subdued and prices at the PPI Intermediate demand level -- farther up the value chain -- continue to decline. We think the June 2022 CPI rate was the peak reading for the index this cycle, as the housing market cools, supplies of new vehicles are replenished, and the price of oil stays around $90. The Fed lifted the feds fund rate from 0.0% to above 5.25% over the past 18 months, and the hikes appear to be reducing inflationary pressures. We look for the U.S. central bank to be lowering rates in 2H24 as their concern shifts more toward economic growth.

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Hannover Re is a reinsurance company headquartered in Hannover, Germany. Its roots go back to the 1920s when, in conjunction with the Gerling Group, Haftpflichtverband founded Eisen- und Stahl-Industrie to provide reinsurance services. In the 1960s ownership of the business was turned over to Haftpflichtverband, and Aktiengesellschaft für Transport und- Rückversicherung was founded. This was the basis of Hannover Re. The business expanded into life and health reinsurance in the 1990s, and over the next 30 years expanded beyond its core domestic market of Germany to write business internationally. Hannover sold its commercial specialty insurance business to Talanx in January 2019. Hannover was listed in the 1990s on the Frankfurt Stock Exchange.

In this edition, we explore Australian asset managers; PAB's revenue; and initiating coverage of RELX; and Lithium Americas, Persimmon, and Inwit.