Global Markets Await Key Inflation Data as Investors Remain Cautious

North American Morning Briefing : Investors Await Price Inflation Data

Stock futures made modest gains on Tuesday and bond yields were a touch firmer as investors awaited the PPI inflation report. The figures, along with Wednesday's CPI numbers, could feed into the Federal Reserve's thinking on interest rates. "With the market desperate for relief - and the Fed anxious to provide it - it does appear that the onus is on the data to convince policy makers not to move come September," Sitfel said. The AI trade which appeared to be making a comeback from last week's selloff has continued with Nvidia and Super Micro both gaining premarket. Premarket Movers BuzzFeed narrowed its second-quarter loss and touted new generative AI features. Shares jumped. Rumble narrowed its quarterly loss, despite revenue declining. Shares rose around 7%. Trump Media remained under pressure after Trump posted on X on Monday, for the first time in nearly a year, and gave an interview on the platform. Postmarket Movers FreightCar America raised its outlook for the year. Shares rose 15% Pulse Bioscience named a new co-chairman, issued an update on its bioelectric systems, said it completed its first procedure to remove diseased soft tissues and its first two procedures to treat irregular heartbeats. Shares rose 9.1%. - Analysis: Wall Street's Trash Contains Buried Treasure - Tim Walz's Immigration Record Mirrors Democratic Push to Embrace Migrant The dollar was steady as investors looked ahead to key economic data for clues on the Fed's interest-rate policy. ING said the producer price index data will be a key test for the foreign-exchange market and the consumer price index data on Wednesday will undoubtedly generate higher forex volatility. "We are generally optimistic that data will fall in line with consensus expectations and continue to endorse market pricing for 100 basis points of Fed [interest rate] cuts by year-end." It reckons that the dollar faces an orderly decline over the coming weeks. EUR/USD could rise above 1.10 going into a likely 50 basis points interest-rate cut by the Fed in September, ING said. Sterling hit a one-week high against the dollar and the euro after data showed the U.K. unemployment rate unexpectedly fell in the three months to June. Bonds: The issuance of dollar-denominated investment-grade bonds increased last week, driven by a decline in IG yields, Bank of America said. "While the volumes are heavy, we think they are unlikely to set new records." Dollar investment-grade supply reached $45 billion, higher than the median $36 billion recorded for the first week of August over the past five years, it said, adding that "96% of supply has been from non-financial issuers, while financials are likely waiting for spreads to tighten to more attractive levels." Lazard Asset Management said the time has come for investors to actively increase duration or interest-rate risks, adding the tide has changed and bonds should receive a tailwind from falling central bank interest rates. Energy: Oil prices were weaker as demand concerns, following OPEC's forecast cuts, outweighed fears of growing tensions in the Middle East. Macquarie said oil might see a correction in the fourth quarter, partly due to accelerating U.S. supply growth and the partial return of OPEC+ barrels, noting that futures were showing a decrease in speculative net length investment holds, with the liquidation of long positions exceeding the increase in shorts. Metals: Gold futures were flat ahead of the release of this week's U.S. price Inflation data which should provide clues on the Fed's pathway towards interest-rate cuts. The Fed's rating cut cycle will attract strategic investment in gold, and should prove to be a catalyst for long-term investors, ANZ Research said. Central bank purchases and physical demand also continue to provide a strong base for gold, as will political and economic uncertainty, ANZ said, and any price pullback will attract more investment demand, protecting the downside. Axis Securities said spot gold prices were hovering near the record high of $2,483/oz but a breakout and weekly close above this level "will be a bullish signal, potentially driving prices towards $2,550/oz." TODAY'S TOP HEADLINES Huawei Readies New Chip to Challenge Nvidia, Surmounting U.S. Sanctions China's Huawei Technologies is close to introducing a new chip for artificial intelligence use, overcoming U.S. sanctions to challenge Nvidia in the Chinese market. Chinese internet companies and telecommunications operators have been testing Huawei's latest processor, called Ascend 910C, in recent weeks, according to people familiar with the matter. Huawei told potential clients that the new chip is comparable to Nvidia's H100, which was introduced last year and isn't directly available in China, the people said. German Economic Expectations Nosedive as Global Slowdown Fears Bite Economic sentiment in Germany slumped this month, as weakening views of the health of the global economy exacerbated an already gloomy outlook. The ZEW Indicator of Economic Sentiment, which tracks analysts' economic expectations for the next six months, fell 22.6 points on month to 19.2 in August. That was well behind a forecast of 29.0 from a consensus of economists polled by The Wall Street Journal, and ranks as the largest on-month fall since July 2022. China's Oil-Demand Growth Slowdown Weighs on Global Outlook, IEA Says Global oil-demand growth is still forecast to slow to under a million barrels a day this year and next, with a continued slowdown in Chinese consumption weighing on the outlook, the International Energy Agency said. The Paris-based organization estimates that global demand will grow by 970,000 barrels a day this year and by 953,000 barrels a day the next-marginally lower than previous estimates of 974,000 and 979,000 barrels a day. Total demand is expected to average at 103.1 million and 104 million barrels a day this year and next, respectively. Trump and Musk, on X, Discuss Immigration and Shared Vision for U.S. For over two hours, Elon Musk and Donald Trump bantered on X about national security, energy policy, immigration and more, in a freewheeling conversation that gave the former president a forum to launch personal attacks on his political rivals as both men reveled in their largely shared vision for the country. The discussion on the social-media platform's livestreaming service Spaces-which was delayed because of technical problems-began with Musk asking about the assassination attempt on Trump at a rally in Pennsylvania last month. Musk referred to security failures allowing the shooter to get on a nearby roof. "That does seem crazy," he said. Israel Puts Military on High Alert as U.S. Sends Assets to Middle East Israel put its military on high alert and the Pentagon said it is sending a guided-missile submarine to the region and speeding up the arrival of a second aircraft carrier, amid heightened concerns about a possible Iranian and Hezbollah response to the killing of militant leaders in Tehran and Beirut. Israel set the high-alert level for its military for the first time this month after observing preparations by Iran and Hezbollah to carry out attacks, a person familiar with the matter said. Israel doesn't know whether attacks are imminent and is proceeding cautiously, the person said. Global Atomic 2Q Rev C$304,55; 2Q EPS C$0.01; Dasa Uranium Project Remains on Schedule to Produce Yellowcake in Q126 GreenFirst Forest Products 2Q Loss/Shr C$0.08 High Arctic Announces Completion of Previously Announced Reorganization; Separating North American and Papua New Guinea Businesses; Retained Interests in Existing North American Energy Services Business, High Arctic Remains Listed on Toronto Stock Exchange; Received Conditional Approval to List New High Arctic Common Shares on TSX; Conditional Approval to List the SpinCo Common Shares on TSXV; Intends to Release 2Q 2024 on August 14 I-80 Gold 2Q Rev $7.18M; 2Q Adj Loss/Shr 7c; Establishes At-The-Market Equity Program Imperial Metals 2Q Rev C$131.7M Lobe Sciences: Board Announces Resignations of CEO Philip Young and COO Baxter Phillips III Magellan Aerospace Signs Long Term Agreements With Pratt & Whitney Methanex Corp to Temporarily Idle New Zealand Ops to Assist in Improving Energy Balances; Arrangements Are Expected to Positively Impact Methanex's Q3 and Q4 2024 Earnings Titanium Transportation 2Q Rev C$115.1M; 2Q EPS C$0.00; Sees 2024 Rev C$440M-C$460M All times in GMT. 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North American Morning Briefing : Investors Wait on Inflation News

Stock futures were rising Wednesday after Tuesday's rally in response to a tame inflation report- but not the one that counts. The PPI isn't normally as big of a focus for investors as the consumer-price index due today at 8:30 a.m. ET, which acts as the main benchmark for inflation. Still, if July's CPI reading comes in unexpectedly hot, the market could reverse all of Tuesday's gains and then some. Premarket Movers Alphabet shares lost more than 1%, falling more than most big tech stocks, following a Bloomberg report suggesting the Justice Department was considering a potential breakup of Google. Kellanova : Mars is expected to unveil a nearly $30 billion deal for the the foodmaker on Wednesday. Shares jumped. Postmarket Movers Flutter Entertainment raised its outlook for the year after revenue surged. Shares rose 8.7%. Ouster expects third-quarter revenue to miss analysts' expectations. Shares fell 17%. - Kamala Harris's Economic Team and Agenda Start to Take Shape - So Much About Real-Estate Commissions Just Changed. Here's What to Know. - Six Notable CEOs Who Left Their Jobs Within Months The dollar could rise as inflation remains elevated and this should prevent the Fed from cutting interest rates aggressively, Commerzbank said, adding that the current 3% annual inflation rate is still too high. If the figure is higher than expected, the Fed probably won't cut rates by 50 basis points in September as the market expects, it said. However, ING said the DXY dollar index could break below recent lows around 102.2 in the coming days. Sterling fell after U.K. inflation data came in lower than expected. "Though overall price pressures remain higher than the [Bank of England's] comfort level, the general direction of travel is still trending downwards, an encouraging sign for the Bank's rate-setters," Raymond James Investment Services said. ING said it could weaken further, and "A return above 0.8600 in EUR/GBP looks warranted." There is a chance the BOE won't put great emphasis on the inflation decline given it was driven by a correction in volatile hotel prices, it said. However, until policymakers comment on this and tame any enthusiasm for larger monetary policy easing, markets may price in more rate cuts, also given external pressure from the rise in Fed rate-cut expectations, it added. Energy: Oil prices rebounded amid reports that crude stocks fell for the seventh consecutive week and weaker-than-expected producer-price index data boosted hopes of a September rate cut. According to reports ahead of official inventory data, crude stocks fell by 5.2 million barrels last week. Prices also continue to be supported by a higher geopolitical risk premium, but further gains are capped by persistent concerns over softening demand in China. Metals: Gold futures rose, nearing the record $2,537.7 a troy ounce reached in July. If the CPI figures confirm a slowdown in inflation, a more pronounced response from gold traders is likely given it will raise expectations for a 50 basis point interest-rate cut in September, ActivTrades said. This momentum could even propel gold to a historic high, with additional safe-haven support coming from escalating Middle East geopolitical tensions. Copper Copper prices rose, recovering some ground after Tuesday's losses. Chinese smelters continue to deliver the metal to the London Metal Exchange, but the pace is expected to slow before the end of August, BNP Paribas said. Wage negotiations at the Escondida copper mine run by BHP Group in Chile ended without agreement, triggering a walkout on Tuesday at an operation that accounts for roughly 5% of global mined copper supply. TODAY'S TOP HEADLINES Google's New Phones Aren't Really About the Phones Google has been in the smartphone business for a long while now-with seemingly little to show for it. But even the company that powers 91% of the world's internet searches needs a little extra help sometimes. At an event Tuesday afternoon, Google unveiled the ninth generation of its Pixel smartphone line. These are the phones that Google designs fully in-house, which typically draw high praise from reviewers but generate little in the way of actual sales. Google's Pixel phones accounted for just under 1% of global smartphone shipments last year and the first half of this year, according to data from Counterpoint Research. UBS Profit Beats Expectations as Credit Suisse Savings Accelerate UBS Group reported a second-quarter net profit that beat analysts' estimates and said cost savings from its integration of former rival Credit Suisse would come faster than expected. The Zurich-based banking group said Wednesday that it made steady progress on trimming costs and offloading noncore assets, while its key wealth-management arm continued to attract funds from wealthy clients and its investment bank benefited from stronger activity. Tencent's Second-Quarter Profit Surges, Driven by Advertising, Gaming Segments Chinese technology giant Tencent Holdings reported a surge in second-quarter profit on sustained momentum in its advertising business and a turnaround in the key domestic gaming division after two quarters of declining revenues. The videogame and social-media company said Wednesday that its net profit jumped 82% from a year earlier to 47.63 billion yuan, equivalent to $6.66 billion. The result was higher than the 41.47 billion yuan expected in a FactSet poll of analysts. Foxconn Posts Higher Profit, Record Revenue on AI Server Demand Foxconn Technology Group reported higher quarterly net profit as its revenue rose to a record on robust demand for artificial-intelligence servers. The world's largest contract electronics maker, known for assembling Apple's iPhones, said Wednesday that its second-quarter net profit was 35.045 billion New Taiwan dollars, equivalent to US$1.08 billion, up from NT$33.00 billion a year earlier. That beat the estimate of NT$33.73 billion in a poll of analysts by FactSet. Eurozone Industrial Activity Contracts Again Eurozone industrial output fell for a third-straight month in June, a signifier of how difficult the downturn in the sector will be to shake off. Industrial activity in the currency union ticked down 0.1% in June, compared with a 0.9% decline in May, the European Union's data agency Eurostat said Wednesday. U.K. Services Inflation Eases, Keeping Door Open for More Rate Cuts Inflation rebounded in the U.K. last month but a slowdown in services prices makes it likely that the Bank of England will move to lower its key interest rate again over the coming months. Consumer prices were 2.2% higher than a year earlier in July, rising a little from June. But prices in the services sector eased to 5.2%; the services inflation rate was last lower in May 2022. The BOE and many economists expect services prices, a key focus, to continue to slow, helping return inflation to the central bank's target toward the end of next year, and likely allowing the bank to continue with rate cuts. Japanese Leader Fumio Kishida to Step Down TOKYO-Japan is set to get a new leader this fall after Prime Minister Fumio Kishida said Wednesday he wouldn't seek to stay in office. Kishida, 67, has bolstered relations with the U.S. and South Korea during his three years in office, and under his leadership Japan is nearly doubling its military spending to counter the growing threat from China. But at home, his popularity was hit by a political-funds scandal involving ruling-party heavyweights and relatively high inflation. Algoma Steel 1Q Loss/Shr C$0.07;1Q Rev C$650.5M; Completed Plate Mill Upgrade, Ramping Production Toward Expected Annual Run Rate Capacity of Over 650,000 Net Tonnage Bank of Nova Scoita. S&PGRBulletin: Bank of Nova Scotia To Acquire Stake In KeyCorp Bitfarms. Riot Platforms Reports Beneficial Ownership of 18.9% in Bitfarms Ltd. Bonterra Energy 2Q Rev C$72.5M; 2Q EPS C$0.20 Franco-Nevada Announces Acquisition Of A 1.8% NSR On Newmont's Yanacocha Operations; Consideration for Royalty Consists of $210M Paid in Cash on Closing, Plus a Contingent Payment of $15M in Stock, Payable Upon Conditions; 2Q EPS 41c; 2Q Rev $260.1M Lithium Americas (Argentina) 2Q EPS 1c; Production Guidance of 20,000-25,000 MT of Lithium Carbonate in 2024 Remains Unchanged Minto Apartment REIT 2Q FFO C$0.25/Unit; 2Q Rev C$38.9M Parkland Responds to Application Initiated by Simpson Oil Over January 2019 Governance Agreement; Simpson Oil Believes Standstill and Voting Restrictions Under the Governance Agreement Are No Longer in Effect, Says 'Material Adverse Change' Has Taken Place and There Has Been 'Substantial Churn of Parkland Senior Management While Performance of the Company Has Suffered' Peyto Exploration 2Q EPS C$0.26; Weaker Spot Natural-Gas Prices Will Continue to Prevail During Summer Across N America as Storage Inventories Remain Elevated and Supply and Demand Remain Imbalanced PHX Energy Services Gets TSX Approval to Renew Normal Course Issuer Bid; Might Buy Up to 3.36M Shrs Pieridae Energy 2Q Loss/Shr C$0.12 Strathcona Resources Declares Inaugural Base Qtrly Div of C$0.25 to Be Paid Sept. 27; 2Q Oil and Natural Gas Sales C$1.47B

European Midday Briefing : Investors Play Waiting Game Ahead of Key Data

European stocks were treading water Tuesday, ahead of key U.S. data which will put inflation firmly in the headlines again. Data on Tuesday and Wednesday is expected to show that price growth remained relatively tame in July, keeping alive expectations that the Federal Reserve might cut interest rates in September. "We are generally optimistic that data will fall in line with consensus expectations and continue to endorse market pricing for 100 basis points of Fed [interest rate] cuts by year-end," ING said. Stocks to Watch It is clear that European carmakers ' price and volume assumptions for fully electric vehicles were too optimistic, and hence they should now cut investments, Citi said. It flagged slowing growth in battery-electric vehicle penetration, which is down 1.9% in July on year in Europe's largest economies and BEV sales declined 13% in July on year. There are plenty of reasons to turn positive on Hannover Rueck , Berenberg said, adding the reinsurer's stock has underperformed peers', its valuation is near a two-year trough and its earnings momentum is set to continue. It raised its rating to buy from hold and upped its target price to 260 euros from 235 euros. Stellantis faces challenges, but it still has upside, RBC Capital Markets said. RBC has predicted softer margins in the second half than previously expected, and forecast 2025 earnings well below the consensus, leading to a new price target of 18.00 euros--down from 24.00 euros, but higher than Wall Street's current valuation. U.S. Markets: Stock futures and bond yields were a touch firmer as investors await cues from this week's key economic data. Shares of companies seen benefiting from AI demand continue to recover from last week's selloff. Nvidia and Super Micro both gained about 2% premarket. Home Depot is due to report its earnings later Tuesday. Forex: The euro is unlikely to be derailed by the latest ZEW survey, which could show German economic sentiment fell sharply in August, ING said, as weak eurozone growth is mostly priced in and sticky expected inflation is preventing a large downward repricing in ECB rate forecasts. EUR/USD could rise above 1.10 going into a likely 50 basis points interest-rate cut by the Federal Reserve in September, ING said. The dollar was steady as investors looked ahead to key U.S. economic data for clues on the Fed's interest-rate policy. ING said the U.S. producer price index data at 1230 GMT will be a key test for the foreign-exchange market. However, the consumer price index data on Wednesday will undoubtedly generate higher forex volatility. "We are generally optimistic that data will fall in line with consensus expectations and continue to endorse market pricing for 100 basis points of Fed [interest rate] cuts by year-end." ING said the dollar faces an orderly decline over the coming weeks. Sterling hit a one-week high against the dollar and the euro after data showed the U.K. unemployment rate unexpectedly fell in the three months to June. The fall to 4.2%, below the 4.5% expected by economists in a WSJ survey could cause concern that a retightening labor market could trigger a resurgence in pay growth and make it harder for the Bank of England to achieve its inflation target, Abrdn said. ING said it is unlikely to strengthen much further. The fall in EUR/GBP might be limited as the exchange rate was already trading generally on the cheap side relative to its interest rate differential, ING said. Bonds: This week's major U.S. data releases provide a potentially new gauge to capital markets about Fed interest-rate expectations, Metzler said. Lazard Asset Management said the time has come for investors to actively increase duration or interest-rate risks, adding the tide has changed and bonds should receive a tailwind from falling central bank interest rates. Energy: Oil prices were weaker as demand concerns, following OPEC's forecast cuts, outweighed fears of growing tensions in the Middle East. Macquarie said oil might see a correction in the fourth quarter , partly due to accelerating U.S. supply growth and the partial return of OPEC+ barrels, noting that futures were showing a decrease in speculative net length investment holds, with the liquidation of long positions exceeding the increase in shorts. Metals: Gold futures were flat ahead of the release of this week's U.S. price Inflation data which should provide clues on the Fed's pathway towards interest-rate cuts. The Fed's rating cut cycle will attract strategic investment in gold, and should prove to be a catalyst for long-term investors, ANZ Research said. Central bank purchases and physical demand also continue to provide a strong base for gold, as will political and economic uncertainty, ANZ said, and any price pullback will attract more investment demand, protecting the downside. Axis Securities said spot gold prices were hovering near the record high of $2,483/oz but a breakout and weekly close above this level "will be a bullish signal, potentially driving prices towards $2,550/oz." EMEA HEADLINES Henkel Profit Rises on Growth at Both Business Units Henkel said first-half net profit soared after a strong performance, driven by growth at both of its business units. The German chemical and consumer-goods company said it made 1.03 billion euros ($1.13 billion) in net profit for the period compared with 564 million euros a year ago. Sales fell 1% to 10.81 billion euros, in line with preliminary figures released last month, and grew 2.9% organically. Brenntag Lowers Guidance Due to Industrial Chemical Price Pressure Brenntag lowered its full-year guidance following sustained pressure on industrial chemical prices, and reported lower earnings and revenue for the second quarter. The German chemicals distributor said Tuesday that it now expects operating earnings before interest, taxes and amortization for 2024 to be in the range between 1.10 billion and 1.20 billion euros ($1.20 billion - $1.31 billion). Israel Puts Military on High Alert as U.S. Sends Assets to Middle East Israel put its military on high alert and the Pentagon said it is sending a guided-missile submarine to the region and speeding up the arrival of a second aircraft carrier, amid heightened concerns about a possible Iranian and Hezbollah response to the killing of militant leaders in Tehran and Beirut. Israel set the high-alert level for its military for the first time this month after observing preparations by Iran and Hezbollah to carry out attacks, a person familiar with the matter said. Israel doesn't know whether attacks are imminent and is proceeding cautiously, the person said. Volatility is back in the stock market after a roughly 18-month slumber. Turbulence has mounted since mid-July, culminating last week with the S&P 500 logging both its best and worst days since 2022. Traders have wound down some investments that thrived in calm conditions and pulled back from bets that the sideways action would persist. Wall Street's Trash Contains Buried Treasure Rebound relationships are best avoided, but maybe not in the stock market. In a paper that starts out by stating that "no one enjoys getting dumped, " two investing quants reveal some surprising, and potentially lucrative, traits of companies that have really let themselves go. With about half of the money invested in American stocks now sitting in index funds, and many active managers holding portfolios that resemble them-just try beating the market these days without "Magnificent 7" stocks such as Nvidia or Microsoft-index castoffs have a hard time meeting someone new. China's Oil-Demand Growth Slowdown Weighs on Global Outlook, IEA Says Global oil-demand growth is still forecast to slow to under a million barrels a day this year and next, with a continued slowdown in Chinese consumption weighing on the outlook, the International Energy Agency said. The Paris-based organization estimates that global demand will grow by 970,000 barrels a day this year and by 953,000 barrels a day the next-marginally lower than previous estimates of 974,000 and 979,000 barrels a day. Total demand is expected to average at 103.1 million and 104 million barrels a day this year and next, respectively. We offer an enhanced version of this briefing that is optimized for viewing on mobile devices and sent directly to your email inbox. If you would like to sign up, please go to https://newsplus.wsj.com/subscriptions. This article is a text version of a Wall Street Journal newsletter published earlier today.

All Eyes on July CPI Report

Investors and policymakers are keeping a close eye on the consumer-price index this morning for more insights on the Federal Reserve's interest-rate policy. July's consumer-price index is expected to show the inflation rate held steady on an annual basis. Meanwhile, soaring home prices and smart investments have helped boost a generation once considered perpetually behind. And investors are buckling up for more turbulence after last week's global drama interrupted an unusually calm period. Elsewhere, New Zealand's central bank lowered its benchmark interest rate by a quarter percentage point and sharply revised down its forecast for year-end CPI inflation to 2.3%, from 2.9% previously. Read on for this news and more. Top News What the July CPI May Mean for the Fed On the eve of the Federal Reserve's last meeting, it looked like the July consumer-price index report, due at 8:30 a.m. ET, might serve as one final hurdle to clear ahead of a September rate cut. But weaker-than-expected labor-market data since then suggests a cut is probably likely even if the CPI report is on the firm side. Economists forecast that the consumer-price index will show prices rose 3% in July from a year earlier, as it did in June. New Zealand Central Bank Joins Global Rush to Cut Interest Rates The Reserve Bank of New Zealand cut its official cash rate by 25 basis points to 5.25% at a policy meeting Wednesday, saying inflation is now on track to sustainably return to the desired target band, while its forecasts suggest further cuts are likely before the end of the year. Glynn's Take: RBNZ's Move to Cut Rates Tinged With Emotion By James Glynn The governor of the Reserve Bank of New Zealand admitted to feeling "borderline emotional" about the central bank's decision to join a growing number of its global peers in finally starting interest rate cuts. For a moment, the highly pragmatic Adrian Orr showed the more human side of being a central banker charged with squeezing the life out of an economy over a sustained period in the hope of arresting surging prices. U.S. Economy The Dramatic Turnaround in Millennials' Finances Millennials are now wealthier than previous generations were at their age. They can't believe it either. The median household net worth of older millennials, born in the 1980s, rose to $130,000 in 2022 from $60,000 in 2019, according to inflation-adjusted data from the Federal Reserve Bank of St. Louis. Median wealth more than quadrupled to $41,000 for Americans born in the 1990s, which includes the generation's youngest members, born in 1996. The turnaround has been so dramatic that millennials-mocked at times for being perpetually behind in building wealth, buying homes, getting married and having children-now find themselves ahead. Financial Regulation Market Volatility Is Back. Will It Last? Volatility is back in the stock market after a roughly 18-month slumber . Turbulence has mounted since mid-July, culminating last week with the S&P 500 logging both its best and worst days since 2022. Traders have wound down some investments that thrived in calm conditions and pulled back from bets that the sideways action would persist. 8:30 a.m.: Advance Monthly Sales for Retail & Food Services (US) 8:30 a.m.: Philadelphia Fed Business Outlook Survey (US) 8:30 a.m.: Unemployment Insurance Weekly Claims Report - Initial Claims (US) 8:30 a.m.: Federal Reserve Bank of St. Louis President Alberto Musalem speaks at Greater Louisville Inc event (US) 9:15 a.m.: Industrial Production and Capacity Utilization (US) 1 p.m.: Germany: Assumption Day in Saarland and Bavaria (DE) 1 p.m.: Italy: Assumption Day. Financial markets closed (IT) 2 p.m.: U.S. Securities and Exchange Commission Closed Meeting (US) Research July PPI Report Boosts Odds of September Fed Rate Cut The idea of the Federal Reserve cutting interest rates in September gained further support from the July PPI report, which in turn is putting Treasury note yields under pressure. "July's PPI data are good enough for the Fed to start easing in September," says Pantheon Macroeconomics in a note. The firm attributes the unchanged reading on the core index to the 1.3% fall in the trade services component, which it expects to continue through 2H 2024 but at a slower rate. "We expect gross margins to fall over the coming months as growth in consumers' spending continues to slow, but July's rapid rate of decline is unsustainable," the firm says. - Kirk Maltais Basis Points Atlanta Federal Reserve Bank President Raphael Bostic said Tuesday he expects the U.S. economy will be in a place to lower interest rates within the next several months, adding he doesn't currently see a recession on the horizon. "I'm hopeful that in the next several months, we'll be at a place where we have an economy that's pretty much fully normalized," Bostic said at the Conference of African American Financial Professionals. - Barron's Tuesday's milder-than-expected reading on producer prices in July was translating into fading concerns about inflation by many market participants and reinforcing traders' expectations for multiple rate cuts from the Federal Reserve into mid-2025. Fed-funds futures traders were gravitating toward the likelihood of two full percentage points of rate cuts by July of next year, which would take the Fed's main interest-rate target down to around 3.25% to 3.5%, from a current level between 5.25% and 5.5%, according to the CME FedWatch Tool. - MarketWatch The health of the American consumer is in the spotlight this week with several large retailers set to report in the coming days, including Walmart. The earnings serve as a barometer for consumer spending, which the market fears is slowing down as recession looms. Brokerage Jefferies, however, sees signs that consumer spending remains healthy. Jefferies noted its Consumer Health Index (CHI), which measures consumers' ability to spend, swung higher in June. - Barron's Weakening consumer demand is helping to tame inflation by forcing sellers to bring down prices, says Comerica Chief Economist Bill Adams. July's PPI showed a rise of 0.1% versus a forecast of a 0.2% increase. As GDP and employment growth slow, sellers are being forced to bring back discounting and accept smaller margins, causing prices in industries like machinery and vehicle wholesaling and food and alcohol retailing to drop significantly, Adams says. - Victor Swezey The U.S. shadow banking sector, which involves nonbank financial intermediaries, has been ranked as the most likely cause of a global credit crisis by 29% of investors, the Bank of America global fund manager survey for August shows. U.S. shadow banking entails financial services offered by non-bank institutions such as insurance firms, microloan firms, hedge funds and pension funds. "U.S. commercial real estate (which was June's number one response) remains the second most likely source for a systemic credit event at 21%, followed by the Japanese yen at 19%," BofA says. - Miriam Mukuru To get one of the hottest jobs in tech, Deborah Martinez Castellanos didn't need a bachelor's degree. She needed a flair with a screwdriver-and a high tolerance for artificial lighting. Demand for data-center technicians like Martinez Castellanos is booming, as companies such as Microsoft and Google pour billions into data centers to power everything from AI chatbots to the trillions of photos and emails stored in the cloud. They embody the rise of a class of careers that defy traditional blue- and white-collar distinctions. - Te-Ping Chen The Republican party used to be synonymous with a pro-business mindset, while the Democrats were known as the party of the working class and labor unions. Those alliances have been muddled since the rise of Trump-and particularly after his selection of Sen. JD Vance (R., Ohio) as his running mate. Now, some business and financial leaders say they want lower taxes, lighter regulation and less antitrust scrutiny . They are in favor of free trade and concerned about social and geopolitical instability amid growing movements toward populism and isolationism. Many lean left on social issues such as abortion. - Miriam Gottfried Shortly after President Biden announced his decision to drop out of the race, an informal group of economic advisers began quietly discussing how to best articulate Vice President Kamala Harris's economic vision. Their challenge: differentiating the candidate from her unpopular boss without abandoning his policies. Harris's team is now crafting a policy framework focused on making housing more affordable, lowering costs for families, taking on corporate excess and boosting small businesses, according to people involved in the discussions. - Andrew Restuccia, Tarini Parti and Emily Glazer Inflation rebounded in the U.K. last month but a slowdown in services prices makes it likely that the Bank of England will move to lower its key interest rate again over the coming months. Consumer prices were up 2.2% from a year earlier in July, rising a little from June. But prices in the services sector eased to 5.2%; the services inflation rate was last lower in May 2022. The BOE and many economists expect services prices, a