As investors remain focused on the future path of U.S. interest rates, the release of U.S. consumer price data on Wednesday will be a pivotal moment. July CPI data is expected to edge inflation closer to the Fed’s 2% annual target, with forecasts suggesting core inflation may drop to 3.2%, the lowest since April 2021. This shift could prompt a rate cut as early as September.
U.S. stock futures edged higher on Monday, reflecting caution ahead of key inflation data and retail sector earnings. The previous week’s jobless claims data somewhat alleviated concerns about the labor market, with attention now turning to consumer price data. Several Federal Reserve officials, including Atlanta Fed President Raphael Bostic, are set to speak, offering further insights into the Fed’s stance on inflation.
The quarterly earnings season is wrapping up, with major U.S. retailers like Home Depot and Walmart set to report. Investors will closely watch these reports for insights into consumer spending, especially given recent economic data showing signs of weakness. Additionally, big names like Cisco Systems and Fox Corporation are also on the earnings docket.
On a global scale, the U.K.’s economic data this week will provide clues about the Bank of England’s future rate cuts. Despite a recent rate cut, inflation remains a concern, particularly in the services sector. External MPC member Catherine Mann highlighted the persistent wage and price pressures, indicating that it may take years to dissipate the inflationary impact.
In the commodities market, crude oil prices rose for the fifth consecutive session, driven by easing concerns over the U.S. economy and ongoing geopolitical tensions in the Middle East. Both WTI and Brent crude saw gains, reflecting fears of supply disruptions due to escalating conflicts in the region.
Finally, today’s analyst upgrades and downgrades include significant moves in major companies, with Trade Desk and Morningstar receiving positive outlooks, while Goldman Sachs issued downgrades for Kraft Heinz and Hershey.
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Todays upgrades and downgrades so far :
Baird maintains Trade Desk TTD at Outperform and raises the price target from $110 to $130
BMO Capital initiates coverage on Morningstar at Outperform rating and announces a price target of $352
Goldman Sachs initiates coverage on Mondelez International MDLZ at Buy rating and announces a price target of $80
Goldman Sachs initiates coverage on Kraft Heinz KHC at Sell rating and announces a price target of $34
Goldman Sachs initiates coverage on Kellanova at Neutral rating and announces a price target of $75
Goldman Sachs initiates coverage on Hershey HSY at Sell rating and announces a price target of $185
Goldman Sachs initiates coverage on Conagra Brands at Buy rating and announces a price target of $36
SPY/SPX
Monday’s session marked the low for the week, and price is right back to where it was two Friday’s ago after some extreme volatility. This now marks 4 consecutive weeks lower. I suspect a bounce this coming week as buyers look to take advantage of the weekly timeframe hammer candle.
For this week, the main watch will be how price trades versus the 5385 level, representing last week’s high. Buyers will be looking to to show strength above this level. If successful, price would target 5435, 5485 and 5515. If sellers defend 5385, price will continue to trade in a rangebound fashion and can test 5300, 5240 and 5200.
Upside levels of interest: 5435, 5485, 5515
Downside levels of interest: 5300, 5240 5200
Notable Economic Data
- Tuesday: PPI
- Wednesday: CPI
- Thursday: Jobless Claims
- Friday: Michigan Consumer Sentiment
See you all in chat
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