Marketbites: All Eyes On CPI
Portfolio Manager Commentary:
Stocks continued to rise on Monday with help from a weaker U.S. dollar and growing confidence that inflation has peaked. The S&P gained 1.06%, the Nasdaq rose 1.27%, and the Dow added 0.71%. Energy was the top-performing sector in the midst of a broad market rally. Stocks have been volatile leading up to the Federal Reserve meeting on September 20-21, where the central bank is anticipated to deliver a third-consecutive 0.75 percentage point rate hike.
Recent developments, such as the military success of Ukraine, appear to be boosting investor sentiment. Ukraine launched a large counterattack in the northeast region of the country that forced the Russian army to retreat from strategically important areas close to Russia.
Looking ahead, many traders are optimistic about the August consumer price index (CPI) report being released this morning. The report is a key inflation metric and economists predict it to show year-over-year inflation at 8.1% for the month of August, down from July’s CPI of 8.5%.
Bristol-Myers Squibb ($BMY) stock jumped more than 8% Monday morning after the FDA approved the company's oral treatment for plaque psoriasis known at Sotyktu.
Chart of the Day:
The chart below shows the change in CPI (YoY) and change in CPI minus food and energy (YoY) dating back to December of 2021. As seen, the CPI levels appear to have reached a peak, with August expectations being slightly lower than July's results. Although the CPI appears to be coming down, inflation is still high with numbers not seen since the early 1980's.