The Market Outlook: Analyzing the Volatility and Predictions for the CPI Report
The market has been experiencing notable volatility lately, and today seems to be heading in a similar direction. As we anticipate the release of the Consumer Price Index (CPI) report tomorrow, it is worth examining the significance of this event. Contrary to expectations, some experts believe that the report may not be as crucial as anticipated and could even be misleading.
The Market Pricing
The options market is currently pricing in a less than one percent movement in response to the CPI report. This indicates that any reaction to the report is likely to be temporary. Instead, the market is expected to refocus on upcoming events such as the Jackson Hole conference, non-farm data, and future CPI reports. It is essential to approach the situation with caution and avoid panicking, considering the heightened tension the market has experienced recently.
Anticipated CPI Figures
Looking specifically at the CPI figures, the core CPI is expected to increase by 0.2% month over month, similar to the previous month’s rise. Concerns arise regarding headline inflation, projected to be at 3.3%, largely due to gasoline prices and core goods. However, core services and real estate are not expected to have a significant impact on the inflation rate. Unless there is a major surprise in the numbers, the market will likely continue on its current trend. Base effects, which compare data against a previous period, are also anticipated to play a role in core inflation.
Stock Plays: Disney and Canopy Growth
When it comes to specific stock plays, Disney has recently reported earnings. Based on past performance, the speaker predicts that Disney’s stock may rise to around $92 and has accordingly purchased shares in the company. Another noteworthy mention is Canopy Growth, which is expected to be included in the S&P 500. The speaker has also made investments in this company.
Trading Strategies and Earnings Plays
Discussing trading strategies, the speaker brings up Alibaba and their decision to sell shares before earnings. Anticipating a positive pre-market play based on China’s overall market sentiment and government signals, this move seems promising. Additionally, other post-earnings trades like TTD, Origin, and Wynn Resorts are highlighted. The decline of TTD’s stock despite decent earnings raises questions, while Origin gains the speaker’s curiosity for further exploration. Wynn Resorts is acknowledged for its ups and downs, though its overall performance has been positive.
Amazon and Box: Short Positions and Market Mindset
Among the speaker’s experiences are short positions taken on Amazon and Box. Unfortunately, their short position on Amazon resulted in a $1000 loss, while the Box position resulted in a $100 loss. This serves as a reminder to be mentally prepared and maintain a positive mindset. Approaching trading with creativity and considering both rising and falling markets is crucial. It is also important not to become too emotionally attached to financial transactions, treating them as entertainment. Staying actively engaged and informed is advised.
In Conclusion
In conclusion, the speaker expresses their gratitude and affection for the audience. They wish everyone a good day and emphasize the importance of staying informed and adaptable in the ever-changing market landscape. By remaining alert and proactive, individuals can navigate the market with confidence and seize opportunities as they arise.