By Bill Hornbarger, Chief Investment Officer
Three Things to Watch
- After last week’s poor employment report, the focus will shift to the other half of the U.S. Federal Reserve’s dual mandate—inflation. Wednesday will feature the Producer Price Index while Thursday brings the widely anticipated and followed Consumer Price Index (CPI). Overall CPI is expected to accelerate slightly to 2.9%, while core CPI is forecast to remain steady at 3.1%. A softer core CPI reading could cement a September rate cut and potentially make a larger 50-basis-point cut possible.
- Friday will feature the University of Michigan Consumer Sentiment data. In recent months there has been good and bad news in it with overall sentiment falling this year, but inflation (both short- and long-term) also falling in recent months. Sentiment is expected to fall slightly, while one-year inflation expectations are also expected to decline to 4.5%, which would be the lowest level since February (pre-Liberation Day tariffs).
- The European Central Bank (ECB) meets this week and is expected to leave borrowing rates unchanged. That will happen after Monday’s confidence vote in France. The ECB meeting will feature the first quarterly forecasts since the European Union agreed to a trade deal with the United States that sets tariffs at 15%.
Three Things to Know
- On September 7, 1813, Uncle Sam was born as the nickname of the United States. Uncle Sam, the tall, stern figure in a top hat and star-spangled suit, is one of America’s most enduring symbols, and his origins trace back to the War of 1812. A meat packer in Troy, N.Y., by the name of Samuel Wilson, supplied barrels of beef to the U.S. Army. Each shipment carried the initials “US” to mark government property, but soldiers joked that it really stood for “Uncle Sam,” since Wilson was well-known in the community. (Source: Bespoke)
- The NFL started last week, and this season features a record seven international games. There will be games in Sao Paolo, Brazil; Dublin, Ireland; Madrid, Spain; Berlin, Germany; and three in London. (Source: The NFL)
- China released data Sunday showing that its central bank has increased its gold holdings for the 10th consecutive month. This is also occurring elsewhere as part of a broader risk diversification strategy, which helps explain why gold—traditionally seen as a “risk-off” asset—has reached record highs, while U.S. stocks, considered “risk-on” assets, have also hit record levels. (Source: Mohamed A. El-Erian)
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.