Oil and Inflation (Worse Than You Might Think)

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What’s in Today’s Report:

  • Oil and Inflation (Worse Than You Might Think)

Futures are little changed following a quiet night of news as earnings were solid overnight and investors remained optimistic about a U.S./Iran ceasefire.

There was no incremental progress on a U.S./Iran ceasefire overnight but investors ultimately expect a deal in the near term.

Earnings have been the driver of this recent rally and results overnight were solid, highlighted by WDAY (up 8%).

Econ Today: Consumer Sentiment (E: 48.2, 1-Yr Inflation Expectations: 4.5%), Leading Indicators (E: -0.3%).  Fed Speak: Waller (10:00 a.m. ET).

Focus today will be on geopolitics and any tangible progress towards a U.S./Iran ceasefire will further pressure oil and boost stocks.

Away from geopolitics, the key economic report today is the five-year inflation expectations in the University of Michigan Consumer Sentiment report.  Inflation expectations above 3.0% and closer to 4.0% will make the Fed more hawkish and increase rate hike chances, so the closer to 3.0% in that number, the better.

 

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