The Consumer Price Index (CPI) for August is set to be released on Tuesday. CPI is expected to be up 5.3% year-over-year with core CPI (ex Food and Energy) up 4.2% from a year earlier. That would be the lowest reading in three months for CPI, which remains in focus for investors and the Fed.
Investors will also get important readings on manufacturing,
Producer prices highlight the data calendar in the holiday-shortened trading week. The Producer Price Index (PPI) is expected up 8.2% year-over-year with core PPI forecast to be 6.6% higher than a year ago. Those would be the highest readings on record for the methodology adopted in 2010.
The U.S. Federal Reserve will release the Beige Book report on Wednesday.
Despite it being the end of summer vacation season, this should be a busy week with plenty to focus on:
Key economic reports due this week include consumer confidence, the ISM report on manufacturing, and the August employment report. Consumer Confidence (Tuesday) is expected to slide from last month’s reports on the recent Covid news. ISM manufacturing (Wednesday) is expected to remain strong (consensus estimate 58.5) and above 55 for the seventh consecutive month.
All eyes will be on the Federal Reserve Bank of Kansas City’s Annual Jackson Hole policy symposium Thursday through Saturday. The theme this year is “Macroeconomic Policy in an Uneven Economy”. Two themes to keep an eye on include:
Tapering – Will the Federal Reserve offer a road map on the tapering of bond purchases (currently $120 billion/month)? Fed Chairman Jerome Powell speaks Friday afternoon and market participants expect him to provide some clarity on timing and amounts.
The markets are deep into summer doldrums. However, minutes from the Fed’s last meeting will be released on Wednesday and investors will parse them for any clues on the Fed’s plans for tapering of bond purchases and changes to monetary policy. Market participants expect some clarity on tapering at the Jackson Hole symposium later this month.
The consumer will be in focus this week as retail sales are released on Wednesday and a number of retail-oriented companies will release earnings including Walmart,
Inflation watchers will get readings on both consumer and producers prices this week and both are expected to remain elevated. CPI (Wednesday) is expected to be up 5.3% while PPI (Thursday) is expected to come in at 7.1% on a year-over-year basis. Both of those would be slightly below the previous month (June) readings, but still well within the Fed’s comfort zone.
Another big week of earnings reports on tap this week with more than a quarter of S&P 500 companies due to announce earnings. High profile names include Alibaba, Kraft Heinz, General Motors, Marriott, and ConocoPhillips. Of the approximately 300 companies that have announced earnings quarter to date, 87% have had positive earnings surprises.
High profile economic reports this week include the ISM Manufacturing survey and the July employment report.
This will be the busiest week of the quarter for earnings releases with many prominent tech names reporting. Apple, Microsoft, Alphabet, and Facebook will be the tech companies in focus while Amazon, McDonald’s, Exxon Mobil, and Ford are a few other heavyweight names on the docket. Earnings are expected to be up approximately 70% vs. the same quarter last year and so far 87% of companies that have reported have posted better-than-expected results.
Earnings will be the focus this week with a diverse set of companies scheduled to report. Big names on the calendar include Netflix, Coke, Verizon, and Abbot Labs among others. Earnings are expected to be up 65% to 70% over last year’s Covid depressed second quarter.
The yield on the 10-year U.S. Treasury is in focus.
Second quarter earnings season kicks off this week with the usual early reports from financial companies including JP Morgan Chase, Goldman Sachs, Bank of America, Wells Fargo, and Charles Schwab, among others. PepsiCo and Conagra are two other early quarter bellwethers that report this week.
Inflation watchers will have plenty to chew on this week with CPI (Tuesday),