THE GIST (“THE WHAT”)
The S&P 500 index wavered sideways following a mixed CPI report that solidified expectations of a Fed rate pause in its next policy meeting. All eyes will now turn their focus towards U.S. PPI data release tomorrow looking for further clarity on the inflation outlook. Trading mostly within yesterday’s price range, the index managed to eke out a small gain of 5.52 points (0.12%), closing the choppy session at 4467.43.
Note: Our daily “S&P 500 Trading plan” will be posted around 9:30/10:00am EDT, every trading day.
Trading Plans for WED. 09/13 – CPI – Inflation, Disinflation, but No Recession
For the last published Results of the Morning Trading Plans, please click here
THE DETAILS (The “How & Why”):
Higher oil prices fueled inflation last month. The CPI report for the month of August came in at a 14-month high at 3.7% as against expectations of 3.6%. Annual jump in the underlying inflation was, however, smallest in nearly 2 years. Treasury yields spiked initially following the CPI release but pulled back to settle slightly lower by 4.1 basis points at 4.239%.
Mega-cap technology stocks closed higher as yields slipped. Tesla, Microsoft, Meta, and Amazon all gained more than 1% each. Bucking the trend, Netflix slipped 5.16% after its CFO officer alluded that the ongoing and prolonged Hollywood strikes has started to hurt its business and could negatively impact its operation margin over the coming quarter. Apple also extended its previous session’s slide, falling another 1.19% after unveiling its new products yesterday.
Utilities stocks outperformed indicating a defensive tone to today’s choppy price action ahead of tomorrow’s PPI data release. On the other hand, commercial real estate brokerage stocks were the worst hit after the CFO of CBRE Group hinted towards the challenging business environment in the wake of higher interest rates. CBRE Group was the worst decliner of the session, tumbling 6.71%.
Energy stocks gave up some of their precious session gains as oil prices took a breather from its recent rally. Airline stocks also remained under pressure following lowered guidance by American Airlines Group. Regional banks stocks also added to the day’s losses after Zions Bancorp indicated slowing loan demand.