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Slow Start to Busy Trading Week

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Perhaps it’s better for many of us that the Monday morning following Super Bowl Sunday — especially one that went to the last play of overtime — is not rife with consequential stock market data ahead of the opening bell. We’re down to our last couple busy weeks of Q4 earnings season, and have plenty of economic reports at the ready to help us move trading along this week. Currently, both the S&P 500 and Nasdaq are down -2 points, while the Dow is off -47 points.

The biggest print of the week comes tomorrow morning, when fresh Consumer Price Index (CPI) information for January hits the tape. This was the key report that illustrated the high-rate of inflation which came out of the Great Reopening following the years-long Covid pandemic, when its Inflation Rate (year-over-year headline CPI) topped at +9.1% in June of 2022. Anticipated by a consensus of analysts is that we will have come down half a percentage point to sub-3% for the first time in almost three years.

All CPI results are expected to rise at lower levels month over month, which is a very good sign for inflation cooling down overall. The stickiest of these prints, in terms of inflation, is the year-over-year core CPI (stripping out volatile food and energy costs), which expected to come down 20 basis points (bps) from +3.9% in December to +3.7% last month. Of course, a deeper cut than expected may signal a faster deterioration in inflation rates, which would hasten the Fed’s decision to reduce inflation rates. It’s unlikely that one CPI print would jar a rate-cut loose, but it would be a conversation willing to pay attention to.

The other big day for market data will be Thursday, when Empire State and Philly Fed manufacturing information, Import/Export prices, Retail Sales, Industrial Production/Capacity Utilization, a new Homebuilder Confidence survey and Weekly Jobless Claims all converge on the same morning later this week. Taken together, these reports will, if not offer the market a strong trajectory one way or another, at least keep market trading from floating in space.

After today’s close, we’ll see new earnings reports for Avis Budget Group (CAR - Free Report) , which is expected to be down nearly -60% on expected earnings per share (EPS) on +1% revenue gains; Zacks Rank #2 (Buy)-rated Cadence Design Systems (CDNS - Free Report) , looking for +40% EPS and +19% revenue growth; and Lattice Semiconductor’s (LSCC - Free Report) -8% EPS on +0.17% revenues expected. The final remaining “Magnificent 7” stock, NVIDIA (NVDA - Free Report) , doesn’t report quarterly earnings until mid-next week.

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