Pre-market futures enter a new week of trading basically mixed but flat, following the worst overall trading week since mid-December. Selling news and taking profits have been in order as the interest rate/recession outlook remains uncertain from our current vantage point. The Dow is -20 points at this hour, with the S&P 500 and the Nasdaq +2 and +30 points, respectively. No major market catalysts are expected today.
After the opening bell, the January print from the New York Fed on inflation predictions will be coming out: the one-year previously came out at +5.0% while the five-year was +2.4%. These are better numbers than we were seeing when inflation was leaving the economy swollen through most of last year. That said, +2.4% inflation five years from now is still too high in terms of what the Fed feels are optimum inflation measures. We hope to see these figures come down further.
Tomorrow’s Consumer Price Index (CPI) report for January will take a lot of the air out of the room this week. Expectations are for higher price levels month over month on both headline and core, following a headline for December which was -0.1% — a good sign that inflation is ultimately on the wane. Year over year, 30 basis-point (bps) drops are expected on both headline and core: +6.2% and +5.4%, respectively. This would keep the systematic slow erosion of inflation continue as we’ve seen since interest rate hikes have gotten traction.
Of course, looking for bigger-than-expected drops would be a sign that things are changing in the economy. We’ve apparently been able to avoid collapsing into a recession and we may continue to glide to a soft landing, as the Fed intends. But prints like the CPI — and its sister report, the Producer Price Index (PPI), out on Thursday morning — take the temperature of economic conditions on a monthly basis, so if we are to witness something having “broke” as interest rates continue to creep higher, these are the metrics that will likely show them to us.
Check Point Software (CHKP), a multinational cybersecurity company reported earnings that beat the Zacks consensus by a sold dime this morning: $2.45 per share versus $2.35 expected. Revenues of $638.5 million was a modest beat over expectations as well. Both top and bottom lines show healthy year-over-year growth, as well. Yet shares are selling off -2% on weak early trading thus far. The Tel Aviv, Israel-based company is trading flat year to date.
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