October 1, 2022

Stock futures rise as Wall Street awaits key inflation report

Stock futures rise as Wall Street awaits key inflation report

Ameriprise says this month’s Fed action could be “unlimited” for asset prices

The upcoming Federal Reserve meeting in September, when the central bank is expected to raise interest rates, will likely have already been set in the market, according to Ameriprise chief market analyst Anthony Saglimpin.

“From our point of view, this month’s central bank actions are likely to be inappropriate for asset prices,” he wrote in a note on Monday. “However, incoming economic data over the coming weeks and months and its impact on policy actions next year could play a more important role in shaping the direction of stocks in the medium term.. “

Markets are now expecting the Fed to raise rates by 0.75 percentage points, which means assets may not move much if that is the central bank’s decision. Tuesday’s CPI report in line with expectations may also not move the needle.”

“Unless last month’s inflation numbers change significantly more than expected, including Wednesday’s update of August’s PPI, we believe a 75 basis point Fed hike is basically insured at this point,” he said.

– Carmen Renick

Wells Fargo says relief recovery likely to rebound bear market

The recent rally in stocks is likely to be another bear market bounce and investors should prepare for more volatility ahead, according to Wells Fargo.

“Public execution history, defensive outperformance, high shareholder payouts, high-quality, low-value stocks remind investors of the hallmark of a bear market,” Zhao Ma, a global portfolio and investment strategist, wrote in a note Monday.

They added that such recoveries occur in almost every bear market and many of them reverse quickly, leaving investors with regret.

“Although a bear market bottom is difficult to anticipate, in the past, market bottoms were usually preconditioned by excessively pessimistic market sentiment and a sign of eventual improvement in the underlying economic or market issue,” Ma said. “We think we’re not there yet in either respect.”

In the meantime, Ma recommends investors look for defensive stocks with low volatility, high earnings and share repurchase returns. He also says that investors should look for high-quality names with profitability, leading market share, and reasonable market prices.

– Carmen Renick

US stock futures rose ahead of Tuesday’s CPI report

US stock futures rose on Monday night as Wall Street looked ahead to the August CPI report due to be released on Tuesday morning. The report will give investors an update on the inflation situation in the US and is one of the last data the Federal Reserve will see before its September meeting.

Dow Jones Industrial Average futures rose 55 points, or 0.17%. S&P 500 and Nasdaq 100 futures rose 0.18% and 0.21%, respectively.

– Carmen Renick