Market Overview - Stocks opened cautiously higher but ended mixed, indicating potential volatility throughout the week as Wall Street anticipates clues on rate cuts from the upcoming Fed minutes and Jerome Powell's speech [1][6] - The July jobs report was significantly lower than expected, which has increased expectations for a quarter-point rate cut at the next Fed meeting in September, with some speculating a half-point reduction [2][5] Retail Earnings - Major retailers are set to report earnings this week, providing insights into consumer spending amidst higher tariffs and persistent inflation [7] - Walmart is expected to show strong underlying momentum in its fiscal second-quarter results, with a justified valuation of 38.5 times forward earnings due to significant margin expansion opportunities [8][9] - Target is anticipated to report year-over-year declines in both revenue and earnings, leading to a downgrade by BofA Securities to Underperform, with a lowered price target of $93, indicating over 11% downside potential [10][12] Competitive Landscape - Target faces increasing long-term sales and margin risks due to slowing digital sales growth, competitive threats from Walmart and Amazon, and various pricing pressures [11] - The consensus recommendation for Target among analysts is a Hold, with a mix of ratings reflecting cautious sentiment [12] Pharmaceutical Developments - Novo Nordisk's shares rose 3.7% following the accelerated FDA approval of its obesity drug, Wegovy, for treating a serious liver disease, which may help shift momentum for the company after a challenging start to the year [13][14]

Sam, it's great to see you today. Uh, set the scene for me a little bit when you're looking at how to balance the geopolitical movement, which the markets appear to be shrugging off and what comes down the pike in a couple days at Jackson Hole. >> Hey, Contessa.Well, as we pivot from the dramatic to the mundane, yeah, I guess investors are now thinking, well, what's going to come out of Jackson Hole. Uh, is the chair likely to say that they are still data dependent. And if that is the case, well then we're ...

Market Trends - Crypto market is declining due to reduced expectations of a September rate cut [1] - The probability of a September rate cut has decreased significantly, now standing at 829% [1] Investment Opportunities and Potential Risks - Market participants should closely monitor the rate cut data as it will significantly influence future price movements [1]

RT Yahoo Finance (@YahooFinance)"It's the fact that we're probably going to get a rate cut at the next Fed meeting in mid-September," Investopedia Editor-In-Chief @calebsilver says on PPI data. "We may get as much as a half a basis point cut." https://t.co/azYnmnB3y7 ...

And where are stocks heading from here. Well, we welcome Ed Yardi to Power Lunch. He is founder and head of Ardeni Research.Ed, great to have you on. >> Thank you very much. >> All right.Why do you think the market is not reacting a little more negatively to the hot inflation read and a lowered expectation of more Fed rate cuts in the future. Well, I think the uh market hasn't given up on the idea that the economy is actually resilient, that it doesn't necessarily need lower interest rates and that if we ge ...

Market Reaction to Economic Data - Initial limited market reaction to hot PPI and tame claims data [1] - Market opinion diverges from Fed speak, prioritizing job numbers over inflation data [3][4] - Dollar index slid after weak jobs report and failed to recover, indicating market sentiment [4] Interest Rate Expectations - Two and ten-year Treasury yields initially rose following the hot PPI data, increasing by approximately 005% to 006% [2] - Market anticipates a rate cut in September, based on Fed fund futures [5] - Fed fund futures pricing of 55% or higher three to five sessions before a meeting typically leads the Fed to align with market expectations [4] Jobs Report Impact - Poor jobs report for July, including negative revisions, had a significant impact on the market [3] - Market reaction to the jobs report was more pronounced than the reaction to inflation data [3]

Interest Rate Expectations & Market Impact - The market has largely priced out the possibility of a 50 basis point rate cut in September, with the conversation shifting to either a 25 basis point cut or no cut at all [1][2][3] - Expectations for multiple rate cuts in 2024 are diminishing, with some suggesting only one or two cuts by the end of the year [2][15] - The potential for a "hawkish cut" is being considered, where the Federal Reserve cuts rates but maintains a hawkish stance [3] - The market's optimism, particularly in sectors like biotech, small caps, and homebuilders, is being re-evaluated in light of the hotter-than-expected PPI data [2] Sector Performance & Investment Strategies - Small-cap stocks have been significantly influenced by the prospect of rate cuts, and their performance may be hindered if rate cut expectations are scaled back [6][7][8] - Homebuilder stocks, which had been performing well, may see their "sizzle" diminish due to the changing rate cut narrative [4][5] - Wells Fargo Investment Institute has downgraded small caps to unfavorable, citing concerns about slowing economic growth and high borrowing costs [12] - An equal-weight strategy (RSP) is being considered as an alternative to mega-cap and small-cap investments, offering diversification without the risks associated with small caps [17] Economic Outlook & Fed Policy - The Producer Price Index (PPI) data has introduced uncertainty into the "no inflation" narrative and the likelihood of significant rate cuts [1][6][14] - The Federal Reserve is likely aiming for a consistent rate-cutting approach, avoiding the "stop-start" pattern of the 1970s and 1980s [15] - There's a risk that the Chairman of the Federal Reserve might temper expectations for a guaranteed 25 basis point rate cut at Jackson Hole [19] - Structurally higher interest rates are anticipated compared to the past decade, which will impact sectors like homebuilders [16]

Bond Market & Interest Rates - The short end of the market is likely to experience one or two rate cuts before year-end, which could provide some support [1] - High credit card interest rates, around 25%, are a key concern [1] - Housing market is identified as the critical missing piece in the economy [2] - Treasury Secretary's comments on lowering rates may have had some effect [3] - Market participants experience a sense of relief after CPI releases, even if slightly warmer than expected, leading to lower yields for twos and tens maturities [4] Dollar Index & Speculative Trading - The dollar index is sensitive to the administration's pressure for lower rates due to its wider audience of speculative trading [5] - A close below 98 on the dollar index is expected to maintain selling pressure, according to technicians [5] - The dollar index has retraced a significant portion of its bounce from multi-year lows seen in early July [5]

Market Performance - Tech-heavy indices showed little movement, while small caps and blue chips surged, indicating a broadening market rally [1] - The S&P 500 increased by 0.1% to 6,451.86, slightly retreating from an all-time high of 6,480 [2] - The Russell 2000 rose by 1.3% after a 3% jump on Tuesday, marking its best two-day rally since April 9 [3] Economic Indicators - Treasury Secretary Scott Bessent called for a 50-basis-point rate cut in September, suggesting current rates should be 150-175 basis points lower [3] - July inflation data showed headline CPI at 2.7% year-over-year, below the expected 2.8%, while core inflation rose to 3.1% from 2.9% [4] Sector Performance - Healthcare and materials sectors led equity gains, while industrials and utilities lagged [4] - Data center-linked stocks weakened, with GE Vernova Inc. dropping 6% after significant year-to-date gains [5] - Advanced Micro Devices Inc. outperformed in the semiconductor sector, increasing by 5% to its highest since mid-July 2024 [5] Commodity and Cryptocurrency Trends - Gold rose by 0.3% and silver gained 1.6%, supported by a weaker dollar and falling Treasury yields [6] - Oil prices fell, with WTI down 1.4% to $62.23, marking its eighth loss in ten sessions [6] - Bitcoin remained steady at $120,000 [6] Stock Movements - Cava Group Inc. fell by 15%, while CoreWeave Inc. dropped 18%, and Performance Food Group Company rose by 4.1% [11] - U.S.-listed Chinese stocks rallied, with Alibaba Group Holdings Ltd. up 3%, Baidu Inc. rising 3.7%, and Li Auto Inc. gaining 3.6% [11]

Why don't we start off with the with the markets hitting new record highs once again after that CPI report that in all honesty it was kind of mixed. Uh you know headline was better than expected core was just slightly hotter than expected. What's your take on that.Well I think it was it's just a reflection of the fact that the market was bracing for a hot CPI knowing that not only was the Fed but economists were warning that we'd start to see inflation coming through uh in the July CPI report. So, I think i ...