Three Things to Watch
- This is inflation week with three separate reports on prices: Consumer Price Index (CPI), Producer Price Index and University of Michigan inflation expectations. CPI will be the focus and is expected to continue to moderate. The closely watched core reading is forecast to increase 0.2% month-over-month and 2.5% year-over-year, which would represent the lowest reading since the start of the war with Iran.
- Retail sales and consumer sentiment will both be out on Friday. Retail sales are expected to show a continuation of the moderate pace of spending, while sentiment remains soft. It hit a record low for the series in May and has rebounded slightly in recent months. High energy prices and the political divide are currently outweighing strong stock prices and a low unemployment rate.
- Earnings season is almost over and it has been a blowout with Corporate America, poised for the biggest earnings upside surprise ever. Closely watched names that report this week include Applied Materials, Cisco and Simon Property Group.
Three Things to Know
- Corporate America is currently on pace for the biggest earnings beat ever recorded. S&P 500 companies are beating earnings-per-share estimates by an aggregate +29.2%. To put this into perspective, the five-year average stands at +7.0%, which is already historically high. In other words, S&P 500 companies are now beating already high expectations by ~4.2 times the five-year average. On top of this, the blended net margin for the S&P 500 is up to 16.9%, also an all-time high. (Source: The Kobeissi Letter)
- The percentage of consumers who expect the stock market to be higher over the next 12 months is now at the highest level ever recorded, even above the dot-com peak. At the same time consumer sentiment recently fell to the lowest reading in history. People are simultaneously highly optimistic about the stock market and highly pessimistic about their own financial situation. (Source: Bravos Research)
- On August 6 and August 9, 1945, the United States detonated two atomic bombs over the Japanese cities of Hiroshima and Nagasaki, respectively, during the final days of World War II. The aerial bombings killed 150,000 to 246,000 people, most of whom were civilians, and remain the first and only uses of nuclear weapons in an armed conflict. (Source: Wikipedia)
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.
5826153 – EXP: 08/31/2029