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- Futures pause with CPI on deck 📈
Futures pause with CPI on deck 📈
Traders are bracing for a crucial inflation update this morning in the form of the June CPI Report.
Chris Dinello
July 11, 2024
Good Morning!
It's Chris from Elite Trade Club, here to give you this morning's premarket trading news.
Let’s get ready to trade!
Markets 📈
Stocks rallied on Wednesday, with the Nasdaq and Russ2K leading the charge higher. The Dow and S&P 500 were close behind with gains of just over 1%.
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Futures are cooling off in the wake of yesterday’s rally. S&P 500 contracts are currently showing a 0.1% decline.
What to Watch Today:
New inflation insights will be unveiled at 8:30 a.m. when the June Consumer Price Index report hits the market. Economists expect CPI to increase by 0.1% compared to last month and 3.1% from a year earlier. The report could set the tone for today’s trading session so keep a close eye on it.
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Premarket Highlights 🔎
What to Watch in Thursday’s CPI Report 📉
A crucial inflation report due on Thursday may strengthen expectations for the Federal Reserve to cut interest rates in the coming months.
Anticipated CPI Data 📊
The consumer price index (CPI) report for June is scheduled for release at 8:30 a.m. ET. Economists surveyed by Dow Jones expect CPI to rise 0.1% month-over-month and 3.1% year-over-year. The core CPI, excluding food and energy prices, is projected to increase 0.2% from May and 3.4% since June last year. In May, CPI was unchanged month-over-month and up 3.3% annually.
Federal Reserve Insights 🏦
This report follows Federal Reserve Chair Jerome Powell's testimony on Capitol Hill. Powell did not specify when rate cuts might start but noted that the Fed views the economic risks as balanced between inflation and recession. He also mentioned that the Fed does not need to wait until inflation reaches the 2% target to begin cutting rates.
Economic Indicators 📉
Recent economic data suggests cooling inflation and economic growth, including a slight uptick in June unemployment to 4.1%. The components of the CPI index, especially shelter and medical services, will be closely watched as they are significant parts of the personal consumption expenditures index, the Fed’s preferred measure of inflation.
Market Reactions 📈
Stocks and bonds have rallied in July, reflecting growing confidence among traders in a potential rate cut this year. The S&P 500 reached a record high, crossing 5,600 for the first time on Wednesday. Fed funds futures pricing indicates traders expect the Fed to hold rates steady at its meeting later this month and then cut rates in September, according to the CME FedWatch Tool.
Conclusion 🚀
As markets remain optimistic, the upcoming CPI report will be pivotal in shaping expectations for the Federal Reserve's next moves. Traders and economists alike will be scrutinizing the data to gauge the likelihood of an imminent rate cut, influencing market dynamics in the months ahead.
Featured Earnings 💰️
PepsiCo [PEP] ... AM
Delta Air Lines [DAL] ... AM
Methode Electronics [MEI] ... AM
Bank7 [BSVN] ... AM
Northern Technologies International [NTIC] ... AM
Educational Development [EDUC] ... PM
Economy 🏗
Initial jobless claims [Jul] ... 8:30a
Consumer price index [Jun] ... 8:30a
Monthly U.S. federal budget [Jun] ... 2:00p
Running Hot 🔥
Gainers
Blue Star Foods [BSFC] >> +63.1%
CNS Pharma [CNSP] >> +32.3%
Kazia Therapeutics [KZIA] >> +48.1%
Decliners
Inspire Veterinary [IVP] >> (25.1%)
Warrantee [WRNT] >> (23.4%)
ReTo Eco-Solutions [RETO] >> (20.7%)
Cyngn [CYN] - Last Close: $3.96
This morning, Cyngn said Alta Equipment Group has joined its dealer network.
With more than $1 billion in annual sales, Alta will now include Cyngn’s autonomous vehicles in its catalog.
The company says it plans to continue growing its dealer network by adding more distribution partners in the near future.
CYN is up 66.7% on over 2 million shares traded.
My Take: CYN is likely getting a bit of a boost from its highly elevated short rate. The short squeeze may even be the primary engine behind today’s rally.
Volcon [VLCN] - Last Close: $3.65
Recent insider transactions involving UBS Group AG have triggered a massive rally in shares of Volcon.
According to Form 4 filings, UBS made several odd trades, including both buys and sells, on July 5th and 7th.
The trades were odd. Some involved only one share. The trading pattern is unusual for a group as large as UBS.
Still, VLCN is up 73.1% on over 6 million shares traded.
My Take: VLCN also had an elevated short percentage of 12.66% as of June 14th. Given the relatively small size of the UBS transactions, I’d wager the short squeeze is the primary reason for this rally.
Renalytix [RNLX] - Last Close: $0.3019
Renalytix just announced a collaboration with the Steno Diabetes Center in Copenhagen to advanced medicine solutions for diabetes and chronic kidney disease patients.
Under the partnership, the organizations will investigate core elements necessary for the successful clinical translation of Renalytix’ KidneyIntelX system.
Renalytix CTO Fergus Fleming said of the partnership, “The insights gained from this collaboration will be pivotal in informing our commercialization and product development activities in the US and abroad.”
RNLX is up 70.8% on more than 10 million shares traded.
My Take: This partnership could hold a lot of promise for RNLX and it could lead to more collaboration deals down the road.
QuantumScape [QS] - Last Close: $5.41
QuantumScape has struck a deal with Volkswagen securing the production of solid-state batteries.
Under the deal, QuantumScape will license Volkswagen’s PowerCo battery unit to mass-produce batteries based on its technology in exchange for “technological progress and certain royalty payments.”
The deal supplants a previous joint venture agreement between the two companies.
It’s also worth mentioning that Volkswagen owns a 17% stake in QuantumScape.
QS is up 31.7% on more than 7 million shares traded.
My Take: QS just sweetened the pot for itself and its shareholders. Financial specifics weren’t disclosed but the company is likely to see a major influx of revenues as a result of this deal.
That's it for today! Thanks for reading, and good luck out there!
Best Regards,
— Chris D.
Elite Trade Club
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