U.S. stock futures dipped on Thursday as investors await the release of September’s CPI report, scheduled for 8:30 a.m. ET. The report is expected to provide further indications of whether inflation is continuing to cool. Economists surveyed by Dow Jones predict a modest 0.1% increase in the CPI monthly and a 2.3% rise over the past year. Additionally, Thursday morning will see the release of weekly initial jobless claims, adding to the day’s economic data that investors will be closely monitoring.

European markets opened slightly lower on Thursday morning as investors awaited the latest U.S. inflation data. The insurance sector saw a boost, with stocks rising by 0.72%, driven by stronger prospects following Hurricane Milton’s severe impact on Florida. Conversely, mining stocks experienced a decline, falling by 0.8%. This mixed performance reflects the varied investor sentiment across different sectors in anticipation of the upcoming economic indicators.

Asia-Pacific markets experienced a positive close on Thursday, with several key indices showing gains. In China, the central bank announced it is accepting applications from financial institutions to participate in a new liquidity tool, initially valued at 500 billion yuan ($70.7 billion), aimed at providing easier access to capital for the stock market.

Economic Calendar

Earnings Calendar

Notable reports for Wednesday before the bell include DAL, DPZ, NEOG, & TLRY. After the bell there are no notable reports.

News & Technicals’

Japanese convenience retailer Seven & i Holdings, the parent company of 7-Eleven, has revised its earnings forecast for the fiscal year ending February 2025, lowering its expectations. This decision comes as the company faces increasing pressure from investors to streamline its extensive business portfolio. In response, Seven & i Holdings announced plans to establish an intermediate holding company to manage its supermarket food business, specialty stores, and other ventures. This strategic move aims to enhance operational efficiency and address investor concerns about the company’s diverse range of businesses.

Amazon is experimenting with integrating automated mini warehouses into Whole Foods supermarkets, creating a new store format that enhances the shopping experience. This innovative approach allows customers to purchase items from Amazon’s online store and its mass-market supermarket chain while browsing Whole Foods, with the convenience of picking up their orders at checkout. By streamlining the shopping process, Amazon aims to attract more grocery shoppers and gain a competitive edge over its rivals, offering a one-stop solution for all their shopping needs.

Two former Pfizer executives, Ian Read and Frank D’Amelio, who were previously associated with activist investor Starboard Value’s campaign at the struggling pharmaceutical company, announced late Wednesday that they would step back from the effort. Both Read, the former CEO, and D’Amelio, the ex-CFO, expressed their full support for current CEO Albert Bourla and his management team. Meanwhile, Starboard Value has acquired a significant stake in Pfizer, amounting to approximately $1 billion, as it seeks to drive a turnaround at the company.

At their September meeting, Federal Reserve officials agreed to cut interest rates but faced uncertainty about the extent of the reduction. Minutes released on Wednesday revealed that a substantial majority of participants supported a half-percentage-point cut, though some expressed reservations about such a significant move. Since the meeting, economic indicators have suggested that the labor market is stronger than anticipated by those advocating for the 50-basis point cut, adding complexity to the decision-making process.

As we wait for September’s CPI report one must wonder if yesterday’s big push that set new record highs in the DIA and SPY if investors will be rewarded for their anticipation or disappointed should prices reverse.  We will soon find out.  The sharp rally in bond yields pushing rates higher seems to be a substantial contradiction to the bullishness.  That said, it would be wise to be prepared for anything including the possibility we will still have to wait for earnings to really get prices moving.

Trade Wisely,

Doug