By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch
- The market’s attention will shift to inflation data, with the Producer Price Index (PPI) and Consumer Price Index (CPI) released Tuesday and Wednesday, respectively. Consumer prices are expected to tick up slightly in July, with both the overall and core readings up 0.2% month-over-month. That would result in year-over-year readings of 3% (unchanged) for overall CPI and 3.2% (down slightly) for core inflation. The consensus numbers likely wouldn’t change the narrative on an expected rate cut in September when the U.S. Federal Reserve (Fed) meets again.
- Retail sales will be reported on Thursday and are expected to show consumer spending up modestly, with retail sales expected to increase 0.4% and the core control group up a modest 0.1%.
- The second-quarter earnings season is wrapping up, and the quarter has been strong. This week will see reports from Walmart, Home Depot, Cisco and Deere.
Three Things to Know
- In the second quarter of 2024, the group of “Magnificent 7” stocks’ net income, excluding Nvidia, rose by 30% year-over-year, the slowest growth since the second quarter of 2023. This is down from 51% in the first quarter of 2024 and below the record 57% seen in the fourth quarter of 2023. It is estimated that the growth rate will decelerate further to 17% in the third quarter of 2024. Meanwhile, the Magnificent 7 have erased $2.3 trillion in market cap over the past three weeks. (Source: The Kobeissi Letter)
- Jobless claims declined last week, the Atlanta Fed gross domestic product (GDP) for the third quarter currently stands at 2.9%, and the Dallas Fed weekly GDP indicator is currently 2.2%. There is still no sign of a U.S. recession, with steady growth in daily and weekly data for restaurant bookings, air travel, hotel bookings, credit card data, bank lending, Broadway show attendance and box office grosses, and weekly data for bankruptcy filings is trending lower. (Source: Torsten Slok)
- There were 100 new additions to the Wisconsin State Fair menu this year. Some of the new foods introduced included an alligator taco, a beer cheese and brat spud muffin, birthday cake mini donuts, bourbon toffee, a blue cheese bacon dog, buffalo chicken Rangoon, bubble gum fudge, deep-fried lemonade bites, and a cricket cookie sandwich (made with edible crickets). (Source: The Wisconsin State Fair)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.