The major averages rallied this week as two key inflationary indicators — the consumer price index (CPI) and producer price index (PPI) — both came in below expectations, a positive for a market on edge about inflation and investors asking daily whether it has peaked. Make no mistake, inflation is still incredibly high — up 8.5% annually on headline CPI and 9.8% on headline PPI. But the market is focused on the path ahead. And while one reading does make a trend, this week’s results, in combination with the declines we have seen in recent months in the price of various commodities , and perhaps more importantly the price of oil (given it is a key input in so many industries) speaks to the notion that the Federal Reserve is winning its war on inflation. This makes a “soft landing” — stomping out of inflation without major economic damage — may be in the cards, which is something few thought possible just a couple months ago. Moreover, the weaker-than-expected CPI and PPI results, which also represent a deceleration versus the June readings, follow a much stronger than expected July nonfarm payrolls report . Consider that on a monthly basis, average hourly earnings were up 0.5% while the CPI headline reading was flat for the month. If the Fed can successfully thread the needle and bring down inflation without destroying the job market, it will have done what many thought nearly impossible and set us up for a very healthy economy into 2023. Time will tell. This week certainly was one for the bulls — both in terms of the move up, but more importantly in terms of the results of these key economic readings. Under the hood this week, all sectors closed higher with energy in the lead, followed by financials and materials. Meanwhile, the U.S. dollar index held steady at around the 105 level. Gold rose higher to about $1,815 per ounce. WTI crude prices reclaimed the $90 per barrel level. The yield on the 10-year Treasury remains at around the 2.84% level. We only had one trade this week: We sold 45 shares of Chevron (CXV) Jim Cramer’s Charitable Trust owns 100 shares of CVX, decreasing its weighting in the portfolio to 0.76% from 0.53%. Looking back We received earnings results from Bausch Health (BHC), Wynn Resorts (WYNN) and Disney (DIS). On the macroeconomic front: On Wednesday, we got a weaker-than-expected (which is a positive) consumer price index (CPI) report for the month of July, indicating an 8.5% annual increase, below the 8.7% increase we were expecting. On Thursday, initial jobless claims for the week ending Aug. 6 came in at 262,000, below expectations of 264,000. Also Thursday, similar to the CPI dynamic, the July Producer Price Index was reported to have risen 9.8% annually in July, below expectations of 10.4%. What’s ahead Within the portfolio, we will hear from Cisco Systems (CSCO) on Wednesday after the close. Here are some other earnings reports and economic numbers to watch in the week ahead: Monday, August 15 Before the bell: Li Auto (LU), Weber (WEBR), DouYu (DOYU), Niu Tech (NIU), CLEAR Secure (YOU), Bitfarms (BITF), UpHealth (UPH), Sterling Bancorp (SBT), TherapeuticsMD (TXMD), Rockwell Medical (RMTI), Harbor Custom (HCDI), omniQ (OMQS) After the bell: Compass (COMP), Tencent Music (TME), Fabrinet (FN), Ferroglobe (GSM), Intercorp (IFS), GoHealth (GOCO), ZipRecruiter (ZIP), ThredUp (TDUP), Shoals (SHLS), AMMO (POWW), SkyWater Tech (SKYT), Quest Resources (QRHC), GAN Ltd (GAN) Tuesday, August 16 Before the bell: Walmart (WMT), Home Depot (HD), Sea Ltd (SE), Elbit (ESLT), Premier (PINC), HUYA (HUYA), Lumentum Holdings (LITE), Hanus International (JBI), Tremor International (TRMR), Global-e Online (GLBE), Genius Sports (GENI) After the bell: Agilent (A), LexinFintech (LX), Jack Henry (JKHY), QuickLogic (QUIK), PAVmed (PAVM), AgEagle Aerial (UAVS), Kidpik (PIK), Lulus Fashion (LVLU) 8:30 a.m. ET: Housing Starts 9:15 a.m. ET: Industiral Production & Capacity Utilization Wednesday, August 17 Before the bell: Lowe’s (LOW), Target (TGT), TJX Companies (TJX), Performance Food (PFGC), ZIM Integrated (ZIM), Analog Devices (ADI), Krispy Kreme (DNUT), OneConnect Fin (OCFT), Membership Collective (MCG), RADA Electronic (RADA), Kamada (KMDA), Sportradad Group (SRAD) After the bell: Amcor (AMCR), Bath & Body Works (BBWI), Keysight Tech (KEYS), ZTO Express (ZTO), Synopsys (SNPS), Chemical & Mining (SQM), Wolfspeed (WOLF) 8:30 a.m. ET: Retail Sales 2:00 p.m. ET: FOMC Minutes Thursday, August 18 Before the bell: Kohl’s Corp (KSS), BJ’s Wholesale (BJ), Estee Lauder (EL), NetEase (NTES), SpartanNash (SPTN), Tapestry (TPR), Canadian Solar (CSIQ), NICE (NICE), Youdao (DAO) After the bell: Applied Materials (AMAT), Ross Stores (ROST), 360 Finance (QFIN), OSI Systems (OSIS), Globant (GLOB), Navigator Holdings (NVGS), Bill.com (BILL), Arco Platform (ARCE) 8:30 a.m. ET: Initial Jobless Claims 10:00 a.m. ET: Existing Home Sales Friday, August 19 Before the bell: Deere (DE), Vipshop Holdings (VIPS), Foot Locker (FL), Buckle (BKE), Kelso Tech (KIQ), Kuke Music (KUKE), FUJIFILM Holdings (FUJIY) (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) 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The major averages rallied this week as two key inflationary indicators — the consumer price index (CPI) and producer price index (PPI) — both came in below expectations, a positive for a market on edge about inflation and investors asking daily whether it has peaked.
