Stocks End Lower As Market Awaits CPI Inflation Report  Image: Bigstock Stocks closed lower again yesterday ahead of this morning's CPI report. This is one of the last inflation reports we'll get before the next FOMC announcement on rates on July 27th. The Consumer Price Index is expected to have increased by 1.1% m/m (vs. last month's 1.0%), and 8.8% y/y (vs. last month's 8.6%). Ex-Food & Energy, the consensus is calling for 0.5% m/m and 5.8% y/y (down from the last reading by one tenth of a percent and two tenths of a percent respectively.) With inflation at 41-year highs, many are speculating that inflation may have peaked given the sharp declines in energy and many commodities. But the headline number estimate clearly does not believe that to be the case. We shall see this morning. It comes out at 8:30 AM ET. We'll also get the Atlanta Fed Business Inflation Expectations. Additionally, we'll get MBA Mortgage Applications and the Beige Book report. But again, the CPI report will be the main event. Stocks are still nicely above last month's lows (the Dow is up 3.52% from its lows, the S&P is up 4.15%, and the Nasdaq is up 5.81%). And they are looking for some good news to cheer. But yesterday's NFIB Small Business Optimism Index was not it, coming is at 89.5 vs. last month's 93.1. Inflation was the main culprit weighing on this number. Traders will turn their attention to earnings, after today's CPI report. Full-year earnings for the S&P look much stronger than Q2. But there are plenty of pockets of strength. And with analysts expecting a much stronger second half in the economy, that should translate to upbeat guidance for next quarter and the rest of the year. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
Post a Comment
Post a Comment