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Markets Mostly Higher on Fed Minutes, Ahead of CPI
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Markets started out the session looking good, buy bowed across the board into negative territory, especially the small-cap Russell 2000, which was the only one of the four major indices not to close higher by the sound of the bell. The Dow gained +65 points, +0.19%, while the S&P 500 grew to +0.43% on the day. The Nasdaq outperformed the others yet again, +0.71%, whereas the Russell, breaking its five-day winning streak, came in at -0.19% for the session.
Today, the Fed minutes to its September 19-20 Federal Open Market Committee (FOMC) meeting was released. This most recent meeting yielded no 25 basis-point (bps) rate hike, as expected. It was reported in real time that the decision to hold rates at 5.25-5.50%, and the second such hold in the past three FOMC meetings.
In the minutes, all Fed members voted unanimously to keep rates high until inflation moves down to +2%. They also agreed to “proceed carefully” regarding rate adjustments going forward. A majority of Fed officials believed, as of last month, that one more 25 bps move will be necessary at either the November 1st or December 13th. Others felt no further rate hikes will be needed to curb inflation over time.
Tomorrow morning, in addition to the Weekly Jobless Claims numbers, we’ll get the latest Consumer Price Index (CPI) release, which are expected to come down on month-over-month headline but stay flat on core, both estimated to be +0.3%. Year over year, headline CPI is expected to tick down 10 bps to +3.6% and +4.1% on core, down 20 bps from the previous month. That said, today’s Producer Price Index (PPI) numbers were a tad hotter than expected, so we’ll see if these pass through to the retail side.
Tomorrow we’ll also get earnings results from Delta Air Lines (DAL - Free Report) , Walgreens Boots Alliance (WBA - Free Report) and Domino’s Pizza (DPZ - Free Report) . Delta is expected to bring in +27% on year over year earnings, beating easy comps, while gaining +6.6% on the revenue side. Walgreens is expected to be down -15% on earnings but up +6.5% on sales (the company is also bringing on board new CEO Tim Wentworth, former top executive at Express Scripts). Domino’s expects a +18% earnings increase on -1.5% in revenues year over year.
These figures — both the CPI numbers and the quarterly earnings, including guidance for next quarter — will go a long way in determining the near-term future of the stock market. Some of the big Wall Street banks report on Friday morning. If these companies can produce solid beats (and raises) over the next couple days, regardless how well the Magnificent 7 tech plays in the A.I. space perform, we might see the start of a successful earnings season.
Image: Bigstock
Markets Mostly Higher on Fed Minutes, Ahead of CPI
Markets started out the session looking good, buy bowed across the board into negative territory, especially the small-cap Russell 2000, which was the only one of the four major indices not to close higher by the sound of the bell. The Dow gained +65 points, +0.19%, while the S&P 500 grew to +0.43% on the day. The Nasdaq outperformed the others yet again, +0.71%, whereas the Russell, breaking its five-day winning streak, came in at -0.19% for the session.
Today, the Fed minutes to its September 19-20 Federal Open Market Committee (FOMC) meeting was released. This most recent meeting yielded no 25 basis-point (bps) rate hike, as expected. It was reported in real time that the decision to hold rates at 5.25-5.50%, and the second such hold in the past three FOMC meetings.
In the minutes, all Fed members voted unanimously to keep rates high until inflation moves down to +2%. They also agreed to “proceed carefully” regarding rate adjustments going forward. A majority of Fed officials believed, as of last month, that one more 25 bps move will be necessary at either the November 1st or December 13th. Others felt no further rate hikes will be needed to curb inflation over time.
Tomorrow morning, in addition to the Weekly Jobless Claims numbers, we’ll get the latest Consumer Price Index (CPI) release, which are expected to come down on month-over-month headline but stay flat on core, both estimated to be +0.3%. Year over year, headline CPI is expected to tick down 10 bps to +3.6% and +4.1% on core, down 20 bps from the previous month. That said, today’s Producer Price Index (PPI) numbers were a tad hotter than expected, so we’ll see if these pass through to the retail side.
Tomorrow we’ll also get earnings results from Delta Air Lines (DAL - Free Report) , Walgreens Boots Alliance (WBA - Free Report) and Domino’s Pizza (DPZ - Free Report) . Delta is expected to bring in +27% on year over year earnings, beating easy comps, while gaining +6.6% on the revenue side. Walgreens is expected to be down -15% on earnings but up +6.5% on sales (the company is also bringing on board new CEO Tim Wentworth, former top executive at Express Scripts). Domino’s expects a +18% earnings increase on -1.5% in revenues year over year.
These figures — both the CPI numbers and the quarterly earnings, including guidance for next quarter — will go a long way in determining the near-term future of the stock market. Some of the big Wall Street banks report on Friday morning. If these companies can produce solid beats (and raises) over the next couple days, regardless how well the Magnificent 7 tech plays in the A.I. space perform, we might see the start of a successful earnings season.
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