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Market Recap and the Week Ahead | Inflation Data Thumbnail

Market Recap and the Week Ahead | Inflation Data

What's great about this country is that America started the tradition where the richest consumers buy essentially the same things as the poorest.  - Andy Warhol

Last week's market recap:

  • The S&P 500 was up 3.68% for the week.  Year-to-date the index is down -13.72%.
    • Large-Cap Value leads performance YTD at -7.06%
  • NASDAQ closed the week up 4.15% and is down -22.15% YTD.
  • 10-Year Treasury Rate increased, ending the week at 3.33% from 3.20% the prior week.
    • Fed Funds Target rate is 2.50%
  •   The 1-Year Treasury is yielding 3.64%
  •   A 6 Month Treasury is yielding 3.55%
    • What is your savings account rate?  If it didn’t increase recently, you may want to find a new savings account.

The week ahead, 9/12: 

  • Tuesday: Inflation data! (CPI) Consumer Price Index
  • Wednesday: Inflation data! (PPI) Producer Price Index
  • Retail Sales
  • Preliminary Sept. Consumer Sentiment

Quick Comments:

INFLATION data will dominate this week’s headlines.  CPI data will be released Tuesday morning.  Economists expect headline CPI to come in at 8.1% over the prior year.  On a month-over-month basis, CPI is expected to show prices have eased by .1%.  If realized, this would be the first monthly decline since May of 2020! Expect to hear a lot of chatter… Will the Fed raise 75bps or 50bps at the next meeting?  This debate is mostly noise.  At the next three Fed meetings we could see hikes of 75bps, 50bps, then 25bps, or 50bp, 50bps, and 50bps.  Or some other variation that leads to 150bps by the end of the year.  It’s all the same 150bps total and that’s already baked into the markets.  The important question remains what is the Terminal Rate?  When will the Fed stop raising rates?  Right now, most believe the terminal rate to be around 4%.  If the expected terminal rates gets higher, expect stocks to be under more pressure.  If the expected terminal rate gets lower, we could see stocks rise.  If/when inflation numbers come in, the next concern of focus will be earnings estimates.  Do you think the American consumer will stop spending?  That’s why the Retail Sales data this week will be important.  

The chart below show the potential for inflation to fall FAST:

Source: J.P. Morgan

Please reach out to us to discuss in more detail.


CRA Investment Committee 

Matt Reynolds CPA, CFP®

Tom Reynolds, CPA 

Robert T. Martin, CFA, CFP®

Gordon Shearer Jr., CFP® 

Jeff Hilliard, CFP®, CRPC®

Joe McCaffrey, CFP® 

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