Day Ahead: Top 3 Things to Watch
Here’s a preview of the top 3 things that could rock markets tomorrow.
1. June CPI Seen Staying Tame
Tomorrow the highlight of the economic data will be consumer inflation. The measure of wholesale inflation released Wednesday came in a little hotter than expected.
Economists forecast that in June the consumer price index (CPI) and the core CPI, which excludes volatile food and energy prices, rose 0.2% month over month.
June year-over-year CPI is expected come in at 2.9%, a tad higher than the previous month.
There will also be the weekly data for initial jobless claims, expected to dip slightly form the week before.
2. Fed’s Kashkari and Harker Set to Speak
While the economic data arrive ahead of trading, investors focused on the path of interest rates will also be parsing comments by Minneapolis Fed President Neel Kashkari.
He is scheduled to speak at 8:30 AM ET (12:30 GMT) at a panel on immigration, but may have remarks germane to Fed policy. Kashkari, considered a dove on rates, told Bloomberg recently he is comfortable with rates moving to neutral, but doesn’t think a restrictive rate policy is warranted.
On Wednesday, Chicago Fed President Charles Evans gave some hawkish comments, telling The Wall Street Journal that the strength of the economy means businesses and consumers can live with slightly higher rates.
Philadelphia Fed President Pat Harker will also give a speech Thursday at 12:15 PM ET (16:15 GMT). Harker is also in the camp for rates to rise just to a neutral level.
3. Investors Will Be Watching Delta’s Guidance Closely
Delta Air Lines (NYSE:DAL) is the one major company reporting earnings Thursday.
On average, analysts expect the carrier to report before the bell a profit of $1.74 per share for the latest quarter on revenue of $11.65 billion.
The company itself already lowered second-quarter profit guidance last June to a range of $1.65 to $1.75 a share, so investors may be more focused on its guidance for the third quarter.
Last week, Deutsche Bank (DE:DBKGn) downgraded Delta to hold, citing a lack of positive catalysts. Deutsche also cut ratings on United Continental (NYSE:UAL) and American Airlines (NASDAQ:AAL).