Why Falling Inflation Won’t Help Stocks Anymore
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What’s in Today’s Report:
- Why Falling Inflation Won’t Help Stocks Anymore
- EIA Analysis and Oil Market Update
Futures are slightly higher thanks to better-than-expected tech earnings and despite mixed economic data.
CSCO posted solid earnings and that’s helping extend the tech sector bounce and boosting futures.
Economically, Chinese and UK data was more mixed than good and point to a modest slowing of global growth.
Economic growth is now the main fundamental driver of this market and today is full of important growth updates including, in order of importance: Retail Sales (E: 0.3%), Jobless Claims (E: 234K), Industrial Production (E: -0.1%), Philly Fed (E: 5.8), Empire Manufacturing (-6.0) and Housing Market Index (E: 42). In-line to slightly underwhelming economic data will be the “best case” for stocks in the near term as it increases 50 bps rate cut chances but doesn’t imply a dramatic growth slowdown.
There are also two Fed speakers today, Musalem (9:10 a.m. ET) and Harker (1:10 p.m. ET) and officials might start to be more explicit about a rate cut following Wednesday’s CPI (Atlanta Fed President Bostic said he was open to a cut in September overnight).
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