Like CPI yesterday, PPI confirmed rising prices that topped estimates. The 0.7% MoM headline increase was the highest since June 2022.
Algos, however, are more focused on the continuing decline in VIX.
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Year: 2023
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CPI Tops Estimates: Sep 13, 2023
August CPI came in at 0.6% MoM and 3.7% YoY, slightly higher than expectations. Core CPI was 0.3% MoM and 4.3% YoY, also higher than expectations. This is in line with our forecast, driven largely by higher costs for rent, transportation, and energy.
Futures are flat ahead of the open…
…with VIX making lower lows on algo trading. 
Rising inflation, driven largely by YoY comps for energy prices, should make a Fed pause less likely.
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Charts I’m Watching: Sep 12, 2023
Futures gave back most of yesterday’s gains overnight as the August CPI print approaches.
Our gas price model suggests headline CPI is due for a significant increase.
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Charts I’m Watching: Sep 11, 2023
Futures are up about 0.50% percent on a rebound in tech shares.
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Food for Thought
There’s some good research on marketwatch.com this morning that illustrates the fact that no interest rate inversion (10s1s) in the past 70 years occurred without a subsequent recession. The average lag was about 14 months, meaning that we’re now officially overdue.
Furthermore, none of the post-inversion equity rallies lasted. Every single one was completely reversed, resulting in a bear market. Food for thought.It’s another quiet morning so far, with futures flat for the most part after testing our 20-day moving average target yesterday.
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Charts I’m Watching: Sep 7, 2023
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Charts I’m Watching: Sep 6, 2023
Futures have slipped about 10 points on quiet trading.
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Charts I’m Watching: Sep 5, 2023
Futures are off moderately this morning on low holiday volume.
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Jobs Friday
Futures are up sharply on a rise in the unemployment rate and a beat on payrolls.
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PCE On the Rise
After falling for months, YoY PCE ticked higher in July: 3.3% versus 3.0% in June. Excluding food and energy, the print was 4.2% versus 4.1% in June.
The data pared some of the overnight ramp, with futures easing lower as we approach the opening bell.
In other economic news, personal spending (0.8% MoM) rose faster than expected while income (0.2% MoM) grew slower than expected – not an optimal combination when trying to avoid a recession.continued for members… (more…)
