State of Inflation: Hints of a Peak?

What’s in Today’s Report:

• State of Inflation:  Hints of a Peak?

Futures are sharply lower following another profit warning from a national retailer and mixed economic data.

Restoration Hardware (RH) cut guidance just a few weeks after reporting earnings, citing a sudden deterioration in demand and increasing worries about corporate earnings.

Economic data was mixed as the Chinese manufacturing PMI rose back above 50, while German unemployment rose more than expected (5.3% vs. (E) 5.0%.

Today focus will be on the Core PCE Price Index (E: 0.4% m/m, 4.8% y/y) and if we get a materially hot number above the 4.8% yoy expectation, we can expect more selling pressure while a drop towards the mid 4% range would be a welcomed surprise (and likely cut the early morning losses).  Today we also get weekly Jobless Claims (E: 226K), although that number shouldn’t move markets.