The July consumer-price index to be released on Wednesday may determine whether the recent rally for stocks and crypto can be sustained, as traders look for any signs of slowing inflation.
Still, the market might trade off “regardless” of the CPI, Hatfield said. He thinks expectations for the Fed to become more dovish about its pace of rate hikes may be too optimistic. Seasonality also plays a role, as the stock market tends to trade off in late August, September and early October, Hatfield noted.Meanwhile, a stubbornly hot core CPI reading could mean “a little bit of a weaker market environment,” according to Kevin Gordon, senior investment research manager at Charles Schwab.
“If you look at the overall nominal strength in terms of payrolls and hours worked and average hourly earnings, it was still really strong in nominal terms. So that is generally consistent with higher prices and particularly higher core prices,” Gordon said.
Overall prices will be down from June 2022 but of course y'all be higher yoy by 8+ pct.