The Consumer Price Index rose 0.5% in July (+5.4% y/y, vs. +1.0% y/y in July 2020), up 0.3% ex-food and energy (+3.4% y/y). Prices in many of the areas that had experienced rapid inflation in recent months appeared to be moderate, consistent with the view that much of higher inflation will be transitory (granted, it’s only one month). The Producer Price Index (PPI) rose 1.0% in July (+7.8% y/y), partly reflecting higher margins for motor vehicles. Ex-food, energy and trade services, the PPI rose 0.9% (+6.1% y/y). Import prices rose 0.3% in July, down 0.1% ex-food and fuels.
The University of Michigan’s Consumer Sentiment Index fell sharply in the mid-August reading, reflecting growing concerns about the delta surge. The Chicago Advance Retail Trade Summary (CARTS) data showed a pickup in sales in late July, following some softness in the first half of the month (up modestly relative to June). Job openings rose to another record high in June and the quit rate increased (signs of a strengthening labor market).
–Scott Brown, Raymond James
Happy Monday. Good Luck out there this week.
Global Spotlight
The fate of constitutional reform in Kenya. The Court of Appeal of Kenya is expected to rule Aug. 20 on the constitutionality of the Building Bridges Initiative, proposed reforms that would alter the structure of Kenya’s government.
A mainland legislative meeting about Hong Kong. The National People’s Congress Standing Committee will meet Aug. 17-20 to impose more mainland laws on Hong Kong.
A Japanese diplomatic visit to the Middle East. Japanese Foreign Minister Toshimitsu Motegi on Aug. 15 will begin a nine-day Middle East tour focusing on regional security and the global response to the ongoing COVID-19 pandemic.
Whether snap elections are announced in Canada. Canadian Prime Minister Justin Trudeau on Aug. 15 is expected to announce snap elections to be held Sept. 20, two years early.
Stratfor.com
Economic Calendar
Briefing.com has a good U.S. economic calendar for the week. Here are the main U.S. releases.
Next week, the retail sales report and the FOMC minutes should be the highlights. Retail sales appeared to improve in late July, reflecting healthy back-to-school shopping (often a harbinger of the holiday shopping season), but unit motor vehicle sales were reported lower.
Briefing.com
Last Weeks Numbers
Review Last weeks numbers here.
Earnings
Source I/B/E/S data from Refinitiv
Aggregate Estimates and Revisions
- 21Q2 Y/Y earnings are expected to be up 93.8%. Excluding the energy sector, the Y/Y earnings estimate is 78.4%.
- Of the 457 companies in the S&P 500 that have reported earnings to date for 21Q2, 86.9% have reported earnings above analyst estimates. This compares to a long-term average of 65.6% and prior four quarter average of 83.4%.
- 21Q2 Y/Y revenue growth is expected to be 24.3%. Excluding the energy sector, the growth estimate is 20.1%.
- During the week of August 16, 19 S&P 500 companies are expected to report quarterly earnings.
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