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CPI On Schedule, U.S. Stocks Open Higher

During the U.S. premarket hours, CPI for June hit the newswires. The report came in as expected, adding to concerns over lagging inflation. In many ways today’s numbers are positive. However, without any significant gains in this area, the case for a July rate cut got a little bit stronger. 

At press time, FED Chair Jerome Powell is in front of Congress for day two of his semiannual testimony; perhaps he will mention CPI and revisit the topic of lagging inflation. Here is a quick look at this morning’s key numbers:

Event                                                                                            Actual     Projected     Previous

Consumer Price Index (YoY, June)                                             1.6%           1.6%              1.8%

Consumer Price Index except Food & Energy (YoY, June)     2.1%           2.0%              2.0%

On Wall Street, equities bulls are enjoying today’s CPI release. All three indices have opened in the green, with the DJIA DOW rallying above 27,000 and the S&P 500 SPX pushing north of 3,000. 

DOW Hits 27,000 Following U.S. CPI Report

The year-long uptrend for U.S. stocks is in full swing. Following a modest retracement last Friday through Monday, September E-mini DOW futures are back in the green and challenging all-time highs.

September E-mini DOW Futures (YM), Daily Chart
September E-mini DOW Futures (YM), Daily Chart

Here are two levels to watch for the remainder of the session:

  • Resistance(1): Swing High, 27009
  • Support(1): 62% Current Wave Retracement, 26660

Overview: It looks as though U.S. stock traders are optimistic about the future and relaxed FED policy. Projections for an economic slowdown do not seem to be deterring bidders. At this point, a breakout above 27000 appears to be in the cards for the DOW and the “Trump Rally” in U.S. equities is poised to continue.

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Shain Vernier
US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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