JUNE 12-15: CPI, PPI, FOMC, Retail Sales... - CPI stands for Consumer Price Index, which is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It is used to track inflation and understand the purchasing power of consumers. CPI is calculated by comparing the current prices of a basket of goods and services to the prices in a base period.

PPI stands for Producer Price Index, which measures the average change over time in the selling prices received by domestic producers for their output. It is often used as an early indicator of inflationary pressures in the economy. PPI tracks price changes at various stages of production, such as raw materials, intermediate goods, and finished goods.

FOMC stands for Federal Open Market Committee, which is a committee within the U.S. Federal Reserve System. The FOMC is responsible for making decisions regarding monetary policy, including setting the target range for the federal funds rate, which influences interest rates throughout the economy. The committee meets regularly to assess economic conditions and determine appropriate monetary policy actions.

Retail sales refer to the total sales of goods and services by retail establishments in a specific geographic area over a certain period of time. It is an important economic indicator that provides insights into consumer spending patterns and overall economic activity. Retail sales data can help gauge the health of the economy and consumer confidence.

Investors can be scared by bad data when it indicates negative trends or potential risks to the economy. For example, if CPI or PPI data shows a significant increase in inflation, investors may worry about the erosion of purchasing power and the potential impact on corporate profits. Similarly, if retail sales data indicates a decline in consumer spending, it may signal weaker economic growth and lower corporate earnings, which can unsettle investors.

When investors are scared by bad data, they may react by selling their investments, leading to a decline in stock prices or other asset classes. This can trigger a domino effect as more investors join the selling pressure, potentially causing a market downturn.

Additionally, negative data can also affect investor sentiment and confidence, leading to reduced risk appetite and a preference for safer investments such as bonds or cash.