CPI Preview (Good, Bad & Ugly)
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What’s in Today’s Report:
- CPI Preview (Good, Bad & Ugly)
- EIA Analysis and Oil Market Update
Futures are slightly lower as investors digest Wednesday’s new highs while earnings this morning underwhelmed.
PEP and DAL both posted disappointing guidance and the stocks are down pre-market, weighing on futures.
Economically, data was good overnight as German CPI was in-line while UK GDP was better than expected.
The most important report of the week comes this morning via the CPI report and expectations are as follows: CPI (E: 0.1% m/m, 3.1% y/y), Core CPI (E: 0.2% m/m, 3.4% y/y). To keep things simple, if CPI shows a continued decline in inflation, that will make a September rate cut even more likely and help support stocks. If inflation bounces back, that’s a real surprise negative and don’t be shocked if the S&P 500 falls 1% or more.
Other notable events today include Jobless Claims (E: 239K) and one Fed speaker, Bostic (11:30 a.m. ET), along with the start of earnings season (notable reports today include PEP ($2.15), DAL ($2.37) and CAG ($0.56)). Each of these events are important in their own right but the morning will be dominated by CPI and as that goes, so likely goes the market today.
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