How To Trade The PPI & Sales Number?
The August reading of the consumer price index was a key event for traders. The core CPI, which excludes food and energy, gained 0.3% from the prior month and 4.3% from 12 months earlier.
That compares against estimates of 0.2% and 4.3%, respectively, according to economists polled by Dow Jones. Headline inflation, meanwhile, increased 0.6% on a monthly basis and 3.7% from the prior year, while economists had called for 0.6% and 3.6%.
Biden: Core inflation trends to pre-covid levels
The August CPI reading isn’t expected to change the Federal Reserve’s course at its policy meeting beginning Sept. 19. Fed funds futures pricing data from Wednesday shows a 97% likelihood of rates remaining unchanged next week.
Even if the central bank holds steady on rates this time, markets will likely continue to be volatile in the coming months. Indeed, fed funds futures pricing data shows a roughly 48% probability that rates will rise at the November meeting.
Bad news is good again 😅
Hotter-than-expected inflation has not been negative for the market in the recent past, Fund Strat’s Tom Lee said. Data shared by the firm showed that six out of the past 10 inflation prints showed a hotter-than-expected monthly core inflation rate.
Four out of the six times, the monthly rate of the core inflation exceeded expectations, stocks gained in the following week, and five of the six times, the market gained on that day.
Another inflation metric looms ahead Thursday: the August reading of the producer price index. It is expected to have risen 0.4%, per economists polled by Dow Jones. In July, wholesale prices climbed 0.3%, surpassing expectations. Retail sales are also due before the open.
Buy call
Buy put
Buy call
⚠️ Trading tips: looking at NVDA calls above 460 and puts under 455.35 as well as TSLA calls above 272.63 and puts under 270 after the PPI & retail sales report at 8:30am on Thursday. Can be very volatile in the first 30 minutes so have to take profits fast with stop-loss in place. All the best! 💪
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But there is nothing here to change the Fed’s plans to hold interest rates unchanged at next week’s meeting
The market does not go down on CPI data meaning it must go higher towards XMAS logically!
They are going to keep on pumping it right into the fed meeting easy money for the bulls