The bulls remain in control after shaking off the deflationary China worries pushing higher in a below-average volume day. Some uncertainty or hesitation is normal as we wait on the market-moving data coming over the next couple of days.  Today the bulls or bears will look for inspiration in CPI data and traders should plan for some morning price volatility that could include some big point moves.  After that, markets may go back into a wait-and-see mode with PPI, FOMC, and the Powell press conference. Will he be dovish or hawkish?  Stay tuned and we will soon find out.

While we slept Asian markets closed in the green across the board with moderate gains with Shanghai recovering the key psychological level of 3000 by three points. European markets trade mixed in a cautious morning session waiting on the U.S inflation data.  However, U.S. futures point to a bullish opening in anticipation of the CPI numbers. Plan carefully as we will soon be thinking about the Wednesday data.

Economic Calendar

Earnings Calendar

Notable reports for Tuesday include JCI.

News & Technicals’

Oracle, the software giant, reported disappointing revenue results for its latest quarter. The company missed analysts’ expectations in three of its operating segments: cloud services and license support, cloud license and on-premise license, and hardware. The company blamed the revenue shortfall on currency headwinds, delayed deals, and competitive pressures. The stock fell sharply in after-hours trading, as investors questioned the company’s growth prospects and strategy. Oracle faces increasing competition from rivals such as Microsoft, Amazon, and Salesforce in the cloud computing market.

Ford Motor, the carmaker, announced that it will slash its production target of its all-electric F-150 Lightning pickup by about 50% next year. This is a big change from its previous plan to boost its plant capacity for the EV in 2023. The company said that the reason for the cutback was the lower-than-expected demand for EVs, as they remain expensive and interest rates are high. However, the company also said that the sales of the F-150 Lightning have been growing steadily this year and that it is confident in the long-term potential of the EV market.

Hasbro, the toy maker, announced that it will lay off 1,100 workers as it faces a decline in toy sales, according to a company memo. The company, which is known for its Transformers and My Little Pony brands, said that the job cuts are part of its restructuring plan to reduce costs and improve efficiency. The company had already eliminated about 800 jobs earlier this year, as it was hit by the pandemic, the supply chain disruptions, and the loss of a major customer, Toys R Us. Hasbro said that it will try to minimize the impact of the layoffs on its employees and customers and that it will focus on its digital and e-commerce strategies to boost its growth.

The bulls remain in control as stocks ended slightly higher on Monday on lower-than-average volume, after shaking off the deflationary data out of China. Markets were mostly in a holding pattern, waiting for the big data points of CPI, PPI, and of course the Fed’s rate decision and press conference. The sectors that performed well were consumer staples, industrials, health care, and financial services, a combination of defensive and cyclical sectors that matched the calm session in the major indexes. Today anything is possible as traders react to the CPI figures, so plan for some volatility in the morning session, and don’t be surprised if choppiness ensues in the afternoon as we wait on the PPI and the FOMC.

Trade Wisely,

Doug