Jul 112024

Big Tech soared on Wednesday with Nvidia (NVDA) up 2% and Apple (APPL), Microsoft (MSTF), and Alphabet (GOOG) each climbed 1%.  Anticipation of this morning’s 8:30am ET Consumer Price Index (CPI) prints and Unemployment Claims number will bolster a case for the Fed to start cutting interest rates sent the indexes higher.  The S&P 500 rose 1% and closed at a record high for the 37th time this year and for the seventh up day in a row.

Fed Chair Powell’s House testimony also bolstered hopes of a rate cut soon.  He hinted the stage is almost set by the cooling inflation and jobs market.  He’s paying closer attention to the cooling job market; another sign the Fed is getting closer to a rate cut.  Powell also cautioned that if the Fed waited too long, it would weaken the economy.

Separately at an economic conference in Australia, Fed Governor Lisa Cook made a case for a US soft landing.  “My baseline forecast…is that inflation will continue to move toward target over time, without much further rise in unemployment,” Cook said.  She also said that while soft landings are rare, the fast decline in inflation without a substantial rise yet in unemployment rate bodes well.

This morning’s economic data has the potential to send the indexes in either direction.

Costco (CSCO) shares rose nearly 2.5% after the close.  The company announced they are raising their membership from $60 to $65 per year and their premium membership to $130 from $120.  The 8% increase creates an instant $260M+ from their 52 million memberships.  The first membership increase in 7 years seems overdue as Costco historically increased about every 5 years.

Premarket corporate earnings include Conagra Brands (CAG), Delta Air Lines (DAL), and PepsiCo (PEP).

In addition to the CPI and Unemployment Claims numbers @ 8:30am ET, the economic calendar includes the Federal Budget Balance @ 2:00pm ET.  The Atlanta Fed President Raphael Bostic speaks @ 11:30am ET and St. Louis Fed President Alberto Musalem speaks @ 1:00pm ET.

Volatility remains steady waiting on this morning’s numbers which could easily expand volatility today.

Whale bias is short into the 8:30am ET economic numbers on much heavier than normal overnight large trader volume.


 Posted by at 5:21 am

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