By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch
- The inflation news will be the highlight of the week and will set the tone for the following week’s Federal Open Market Committee meeting. Wednesday’s CPI report is expected to present a mixed bag with the overall CPI forecast to increase 0.6% from the previous month and core CPI forecast to increase 0.2%. That would result in year-over-year changes of 3.6% and 4.3% respectively and would represent an increase in the overall CPI from the previous month. Inflation remains above the Fed’s comfort zone.
- The economic calendar will also feature reports on producer prices, retail sales and industrial production. All are expected to show signs of softening from August’s readings.
- And finally, we will get a couple of high-profile earnings reports from the tech sector with both Oracle and Adobe on tap to report.
Three Things to Know
- Saudi Arabia is the latest country to offload a massive amount of their U.S. Treasury holdings. In February 2020, their holdings peaked at $184 billion and are now down 41%, to $108 billion. Meanwhile, China’s U.S. Treasury holdings just fell to $835 billion, a fresh 14-year low. Chinese holdings of U.S. Treasuries are also down 40% from their highs and quickly dropping. (Source: The Kobeissi Letter)
- U.S. mortgage purchase applications fell 16.7% over the past 10 Weeks, hitting the lowest point since 1995. (Source: Christophe Barraud)
- The days of supply of U.S. crude oil, including the Strategic Petroleum Reserve, currently stands at 46 days, the lowest in more than 40 years. (Source: The Market Ear)
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.