This week looks like it has plenty in store for us with PPI, CPI, FOMC Minutes, and more. Earnings season will kick off this week with reports from big banks and financial institutions including JPMorgan Chase, Wells Fargo, Citigroup, BlackRock, and PNC Financial Services. PepsiCo, Delta Air Lines, Walgreens Boots Alliance, and UnitedHealth will also report earnings. We’ll get the latest inflation reports, with updates on producer and consumer prices on Wednesday and Thursday, respectively. Also on Wednesday, the Federal Reserve will release meeting minutes from its latest Federal Open Market Committee (FOMC) meeting. Also, Amazon will host its two-day “Prime Big Deal Days” event starting Tuesday, in which Prime members can take advantage of deals and discounts on popular brands and products.
On Wednesday, the Bureau of Labor Statistics (BLS) will issue the September Producer Price Index (PPI), tracking inflation from the standpoint of manufacturers and wholesalers. Producer prices are often viewed as a leading indicator of consumer prices, as manufacturers’ costs are eventually passed on to consumers.
The latest Consumer Price Index (CPI) will follow on Thursday. Consumer prices are projected to have risen 0.4% last month and 3.7% from a year ago, the Federal Reserve Bank of Cleveland forecasts. August’s CPI report showed the fastest increase in 14 months as the cost of gasoline surged, although core inflation, which excludes food and fuel costs rose at the slowest pace in nearly two years. Core prices, which exclude volatile food and energy costs, also were likely up 0.4% from August and 4.2% year-over-year. That would mark the smallest annual increase since September 2021.
Investors continue to weigh the Fed’s ‘higher for longer’ rates mantra.
Friday’s jobs data showed a larger-than-expected surge in NFP last month with slowing wage growth, suggesting that monetary policy could remain tight for some time.
Hot inflation figures could reinforce the Fed’s message that interest rates need to remain higher for longer. The Fed is widely expected to hold rates steady at its Oct 31-Nov. 1 meeting, although some traders are betting on another increase.
The U.S. central bank is to publish the minutes of its September meeting on Wednesday with market watchers looking for clues on whether policymakers are leaning towards another rate hike before the end of the year. We already know what the rate decision was, but investors often scour the meeting minutes to look for some edge or insight into future rate decisions. Powell has already indicated that another hike could be necessary this year, so these minutes could be considered a little more carefully as people try to figure out when it is coming and how much it will be.
Investors will also get the chance to hear from several Fed officials during the week including Fed Presidents of Atlanta , Minneapolis , Boston , Dallas along with Vice Chair Philip Jefferson and Governor Christopher Waller.
Third quarter earnings kick-off
Third quarter earnings season gets underway with reports from several big banks with Wall Street investors eager for a catalyst to revive stocks in the face of surging bond yields. We are looking forward to reports from big banks and financial-sector companies including JPMorgan Chase, Wells Fargo, Citigroup, BlackRock, and PNC Financial Services.
Earnings season could determine the near-term path for stocks, with the S&P 500 still holding a 10% gain for the year even after its recent pullback.
Overall, it will be a telling week with all the data release and important meetups. As rates continue to rise the cost of private and public debt will continue to get more expensive as the lower-rate bonds are rolled into the current higher-rate ones.
Have a prosperous week ahead. Trade Safe , Happy Trading !