What’s in Today’s Report:
- Market Set Up Into Today’s CPI Report
- Are Semiconductor Stocks Forecasting the Slowdown?
Futures are slightly higher on mildly positive geo-political news and ahead of the CPI report.
China ended the military exercises around Taiwan and while that was always expected it’s still a mild positive as it reduces the chances of any accidental conflict.
Economically, the Chinese CPI rose 2.7% vs. (E) 2.9% allowing China to continue to actively stimulate its economy.
Today’s focus will be on the CPI report and expectations are as follows: Headline CPI: 0.2% m/m, 8.7% y/y. Core CPI: 0.5% m/m, 6.1% y/y. Markets remain in a “glass half full” mood on inflation so unless the numbers are solidly above expectations, we’d expect stocks to weather the number with only modest declines (while a soft number will likely spur an additional rally).
We also get two Fed speakers, Evans (11 a.m. ET) and Kashkari (2 p.m. ET) but they shouldn’t move markets.