"CPI m/m rose 0.4% (above the forecast of 0.3% and the previous 0.2%), pushing CPI y/y up to 2.9% (from 2.7%), implying that consumer inflation remains sticky. On the other hand, PPI m/m fell 0.1%, suggesting input cost pressures have eased, providing room for margins if companies can maintain pricing. Meanwhile, Retail Sales were mixed: the core figure exceeded expectations while the headline was weaker, indicating consumption remains resilient but uneven."
"For U.S. equities, the interest rate outlook is just as important as the size of the cut at the upcoming meeting. A 25 bps cut accompanied by a message suggesting a consistent easing cycle would lower discount rates, supporting P/E valuations and duration-sensitive sectors such as technology, communications, and software. Conversely, a cut with a "data-dependent"/hawkish tone (especially if suggesting slower and limited cuts) would keep real yields elevated, limiting valuation expansion and leaving the S&P 500 in a sideways range with weak market breadth."
The S&P 500 rose 0.47% early in the week, led by technology and communication sectors as expectations for a 25 bps Fed rate cut on September 18 were maintained. Capital flows remained selective, with energy and financials fluctuating alongside yields and oil prices. Macroeconomic data were mixed: CPI m/m rose 0.4% and CPI y/y to 2.9% while PPI m/m fell 0.1%, implying sticky consumer inflation but easing input costs and potential margin relief if pricing holds. Market outcomes hinge on the Fed's message: a clear easing path would support valuations, while a data-dependent tone would keep real yields elevated and constrain valuation expansion.
Read at London Business News | Londonlovesbusiness.com
Unable to calculate read time
Collection
[
|
...
]