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We start another new week of trading looking at a backloaded set of data: the consequential Consumer Price Index (CPI) comes out this Thursday, followed by the Producer Price Index (PPI) for Friday — both reflecting results from December. We’ll also see a slow trickle of quarterly earnings reports this week until the spigot opens Friday morning with Q4 results from some of the biggest Wall Street banks: JPMorgan (JPM - Free Report) , Citigroup (C - Free Report) , Bank of America (BAC - Free Report) and Wells Fargo (WFC - Free Report) .
Markets have moderated notably since the beginning of the year, but they’re no longer taking a nosedive. As of last Thursday, we’ve begun to see a flattening, which would suggest market participants were interested in taking a bit of air out of the valuation balloon overall; economic data is materializing of late that suggests a March interest rate cut from the Fed may be getting a bit ahead of ourselves; pricing in six or seven cuts throughout the year are being re-thunk, as well.
That said, December core CPI year over year is expected to come in sub-4% for the first time since early 2021, and well off the 6 1/2% core CPI year-over-year rates we were seeing as recently as the second half of 2022. This is one inflation metric where we do see clear results of high interest rates dissolving rampant inflation over time, and any downward surprises may put those projections for near-term cuts back on the table. However, non-core CPI numbers are expected to tick up.
PPI results are projected to post the first positive results since September, coming off a 0.0% print for November. These numbers have been trending within a range of -0.4% to +0.7% since mid-2022. But just like with non-core CPI, PPI moving slightly higher is something worth keeping an eye on, including the rate of change month over month.
Besides the Big Banks on Friday, we expect quarterly results for KB Home (KBH - Free Report) on Wednesday and Delta Air Lines (DAL - Free Report) on Friday. This morning, Boeing (BA) is taking the Dow more than -130 points lower following two incidents where pressurization in its cabin blew out an Alaskan Air (ALK - Free Report) window and a Spirit Airline (SAVE - Free Report) door in Boeing’s 737 MAX-9 planes. Recall the 737 MAX control panel difficulties which led to a year-plus grounding and no sales following two plane crashes overseas. This does not appear to be a re-emergence of prior issues, but another black eye for the model of which Boeing was looking to sell many units.
The S&P 500, meanwhile, is flat ahead of the opening bell. The Nasdaq is +25 points at this hour. Boeing shares are -7.7% currently.
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Wall Street Waits for Key Inflation Data
We start another new week of trading looking at a backloaded set of data: the consequential Consumer Price Index (CPI) comes out this Thursday, followed by the Producer Price Index (PPI) for Friday — both reflecting results from December. We’ll also see a slow trickle of quarterly earnings reports this week until the spigot opens Friday morning with Q4 results from some of the biggest Wall Street banks: JPMorgan (JPM - Free Report) , Citigroup (C - Free Report) , Bank of America (BAC - Free Report) and Wells Fargo (WFC - Free Report) .
Markets have moderated notably since the beginning of the year, but they’re no longer taking a nosedive. As of last Thursday, we’ve begun to see a flattening, which would suggest market participants were interested in taking a bit of air out of the valuation balloon overall; economic data is materializing of late that suggests a March interest rate cut from the Fed may be getting a bit ahead of ourselves; pricing in six or seven cuts throughout the year are being re-thunk, as well.
That said, December core CPI year over year is expected to come in sub-4% for the first time since early 2021, and well off the 6 1/2% core CPI year-over-year rates we were seeing as recently as the second half of 2022. This is one inflation metric where we do see clear results of high interest rates dissolving rampant inflation over time, and any downward surprises may put those projections for near-term cuts back on the table. However, non-core CPI numbers are expected to tick up.
PPI results are projected to post the first positive results since September, coming off a 0.0% print for November. These numbers have been trending within a range of -0.4% to +0.7% since mid-2022. But just like with non-core CPI, PPI moving slightly higher is something worth keeping an eye on, including the rate of change month over month.
Besides the Big Banks on Friday, we expect quarterly results for KB Home (KBH - Free Report) on Wednesday and Delta Air Lines (DAL - Free Report) on Friday. This morning, Boeing (BA) is taking the Dow more than -130 points lower following two incidents where pressurization in its cabin blew out an Alaskan Air (ALK - Free Report) window and a Spirit Airline (SAVE - Free Report) door in Boeing’s 737 MAX-9 planes. Recall the 737 MAX control panel difficulties which led to a year-plus grounding and no sales following two plane crashes overseas. This does not appear to be a re-emergence of prior issues, but another black eye for the model of which Boeing was looking to sell many units.
The S&P 500, meanwhile, is flat ahead of the opening bell. The Nasdaq is +25 points at this hour. Boeing shares are -7.7% currently.