What The Hot CPI Report Means for Markets
What’s in Today’s Report:
- What the Hot CPI Report Means for Markets
- EIA Analysis and Update (Demand Falling)
Futures are sharply lower as markets digest the hot CPI amidst numerous hawkish central bank decisions.
Global central banks are aggressively tightening policy and that was displayed yesterday and overnight as the Bank of Canada and the central banks of Singapore, Philippines, and, Chile all hiked more than expected.
Meanwhile, U.S. Fed Fund Futures are now pricing in a 100-bps hike in July.
Today we get two notable economic reports via Jobless Claims (E: 234K) and PPI (0.8% m/m, 10.4% y/y). Starting with PPI, if we see a big drop (which isn’t expected but possible) that will be a mild positive as PPI is sometimes a leading indicator for broader inflation. Jobless claims, meanwhile, should continue to tick higher towards 250k.
On the earnings front, Q2 earnings season unofficially kicks off today with results from JPM ($2.85) and MS ($1.55) and in addition to wanting to see earnings beats, markets will be looking for commentary from management on the state of the economy, and if that commentary is cautious it’ll be a headwind on stocks.
