The Rotation Out of Tech Continues
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What’s in Today’s Report:
- The Rotation Out of Tech Continues
Futures are modestly higher thanks to solid tech earnings and better than expected inflation data from Europe.
DELL and MRVL, both AI linked tech companies, posted solid earnings and guidance and that’s supporting futures.
Economically, EU HICP (their CPI) declined further to 2.8% y/y vs. (E) 2.9%, giving the ECB more room to cut rates.
Today is typically a quiet day in the markets as traders try to get a head start on the three-day weekend, but there is an important inflation report this morning: The Core PCE Price Index (E: 0.2% m/m, 2.7% y/y). If that report is better than expected, it’ll boost expectations for a 50-bps rate cut in September (positive for stocks) while a higher-than-expected number will push back against a 50-bps cut (negative for stocks).
Other data today includes the Chicago PMI (E: 46.4) and inflation expectations in University of Michigan Consumer Sentiment (1-Yr Inflation Expectations: 2.9%, 5-Yr. Inflation Expectations: 3.0%) but barring major surprises, neither of those numbers should move markets.
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