Key inflation data, new iPhones, and a looming deadline for contentious labor negotiations await investors in the week ahead, the first full trading week of September.
The economic highlight comes on Wednesday morning, when the Consumer Price Index (CPI) for August will be released. The report is set to show headline inflation continues to reverse its downtrend as oil prices rise.
On the corporate side, Apple (AAPL) is scheduled to host its marquee fall event on Tuesday, with new iPhones, Apple Watches, and a new charging port for most devices expected to be announced.
A September 14 deadline also looms in a contract dispute between the United Auto Workers and automakers Ford (F), General Motors (GM), and Stellantis (STLA), with workers threatening a strike when their current deal expires on Thursday.
Last week, markets continued choppy trading that began back in August as concerns over sticky price inflation from an August report on the services sector sent stocks lower on Wednesday, while a decline in tech stocks over fears regarding China’s economy weighed on equity markets.
The tech-heavy Nasdaq (^IXIC) led the losses, falling near 2% during the holiday-shortened trading week. The benchmark S&P 500 (^GSPC) dropped 1.1% while the Dow Jones Industrial Average (^DJI) fell 0.4%
Inflation will be in focus this week with Wall Street expecting another uptick in headline inflation.
Economists forecast headline inflation rose 3.6% over the prior year in August, an increase from the 3.2% rise seen in July. Prices are set to rise 0.6% on a monthly basis. An increase in energy prices is expected to drive much of the increase.
On a “core” basis, which strips out the volatile food and energy categories, CPI is forecast to rise 4.3% over last year in August, a slowdown from the 4.7% increase seen in July. Monthly core price increases are expected to clock in at 0.2%.
The Federal Reserve’s closer focus on core inflation has economists and investors confident the central bank won’t raise rates in September. As of Friday, markets had priced in a 92% chance the Fed holds interest rates steady at the conclusion of its September 19-20 meeting, according to data from the CME Group.
“We do not expect that [CPI data] will tip the scales towards a hike, given the mixed message delivered by the other employment reports and last month’s inflation data,” Jefferies economist Thomas Simons wrote on Friday.
Also out this week will be the August retail sales report, which will provide a look at how resilient US consumers remain after a strong summer. Economists expect retail sales increased 0.1% in August, a noted decrease from the 0.7% jump seen in July.
Data on producer prices, a read on small business optimism, and the weekly report on initial filings for unemployment insurance will also feature on the economic calendar.
iPhone debut
Apple’s update of its signature product on Tuesday is expected to be a market moving event, and comes at a critical juncture for America’s biggest public company.
Apple stock slipped more than 6% in a two-day period last week after Chinese officials told employees at central government agencies to not use iPhones at work. A new high-end phone release from China’s Huawei also added pressure on Apple.
Some analysts, though, said the selloff was “overblown.”
But this trading hangs in the background of Apple’s event, dubbed “Wonderlust,” which is expected to see its iPhone lineup refreshed, new Apple Watches revealed, and the introduction of USB-C charging ports across its device lineup, sunsetting the lightning charger currently powering most iPhones.
“Historically, the iPhone launch has been a sell-the-news event,” Morgan Stanley analyst Erik Woodring wrote in a preview of the event.
“While we don’t expect the day-of stock reaction to the September 12th Wonderlust event to be any different this year, we continue to believe that FY24 iPhone expectations are too low and that the iPhone 15 cycle is not as ‘iterative’ as anticipated, with the potential for both unit and [average selling price] growth.”
Weekly calendar
Monday
Economic data: No notable economic news.
Earnings: Bowlero (BOWL), Casey’s (CASY), Oracle (ORCL)
Tuesday
Economic data: NFIB Small Business Optimism, August (91.3 expected, 91.9 prior)
Earnings: No notable companies set to report.
Wednesday
Economic data: Consumer Price Index, month-over-month, August (+0.6% expected, +0.2% previously); Core CPI, month-over-month, August (+0.2% expected, +0.2% previously); CPI, year-over-year, August (+3.6% expected, +3.2% previously); Core CPI, year-over-year, August (+4.3% expected, +4.7% previously); Real average hourly earnings, year-over-year, August (+1.1% previously)
Earnings: Cracker Barrel (CBRL)
Thursday
Economic data: Initial jobless claims (216,000 previously); Retail sales, month-over-month, August (+0.1% expected, +0.7% previously); Retail sales ex auto and gas, August (0.0% expected, +1% previously); Producer Price Index, month-over-month, August (+0.4% expected, +0.3% previously); PPI, year-over-year, August (+1.5% expected; +0.8% previously); Core PPI, month-over-month, August (+0.2% expected, +0.3% previously); Core PPI, year-over-year, August (+2.6% expected; +2.8% previously)
Earnings: Adobe (ADBE), Lennar (LEN)
Friday
Economic data: Import prices, month-over-month, August (+0.3% expected, +0.4% previously); Export prices, month-over-month, August (+0.3% expected, +0.7% previously); Empire Manufacturing, September (-10.7 expected, -19 previously); Industrial production, month-over-month, August (+0.1% expected, +0.5 prior); University of Michigan consumer sentiment, September, preliminary (69.4 expected, 69.5 previously)
Earnings: No notable companies set to report.
Josh Schafer is a reporter for Yahoo Finance.
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