- Morgan Stanley is estimating a negative month-over-month CPI print for August due to lower fuel prices.
- But the core inflation remained elevated, according to Nomura (driven by housing).
- Shelter inflation is not expected to peak until next year.
- Food inflation should begin to moderate.
- Used vehicle prices have been declining
- Household net worth tumbled last quarter as stocks slumped.
- The Oxford Economics supply chain stress index continues to moderate.
- Economists now expect next year’s growth to dip below 1%.
- Companies are increasingly mentioning “recession” on earnings calls.
- Job openings tend to peak before recessions.
- State tax receipts are slowing.
- The markets are convinced that the Fed will lift rates by 75 bps this month.
- Financial conditions could worsen as quantitative tightening accelerates.
- The PPI is off the highs on a year-over-year basis, but producer price inflation continues to run hot.
- The core PPI was higher than expected.
- Sticky CPI:
- The market is now pricing in almost 200 bps of rate hikes between now and the end of the year.
- The Atlanta Fed’s model estimate for the Q3 GDP growth dipped to 0.5%.
Market Data
- The S&P 500 is in a wedge pattern.
- The stalling US dollar rally was also a tailwind for stocks.
- Short-covering gave stocks a boost last week.
- A majority of companies have been providing negative Q3 EPS guidance.
- The US registered its largest oil release from the Strategic Petroleum Reserve last week.
- Multiple 4% one-day market declines are not common outside of recessions.
Quote of the Week
“Failure is the condiment that gives success its flavor.” – Truman Capote
Picture of the Week
All content is the opinion of Brian J. Decker
