By Geoffrey Smith
Investing.com — The United States releases consumer inflation data for August, a key input for next week’s Federal Reserve meeting. A rail strike looms, while more than 15,000 nurses are on strike in Minnesota seeking a 27% pay raise. Strong Oracle earnings keep stocks in an upbeat pre-market mood and Barry McCarthy is cleaning house at Peloton. Russia has a new headache to worry about, while OPEC is to release its latest global oil demand forecasts in its monthly report. Here’s what you need to know in the financial markets on Tuesday, September 13.
1. Inflation Nation
The big event of the week is upon us. The US is due to report figures for August at 08:30 ET (12:30 GMT), with all that that means for the Federal Reserve’s policy meeting next week.
Analysts expect prices to have fallen, by a meager 0.1%, for the first time since May 2020, due to the prolonged and steady drop in gasoline prices since their summer peak. They have continued their decline since the end of the month and have now fallen for 13 consecutive weeks.
That should send the headline rate down for the second month in a row to 8.1%, still painfully high but a full point below its June peak.
The sting in the tail, however, will be in the numbers, which wipe out gasoline prices and show how widely inflationary pressures have spread through the rest of the economy. The core CPI is expected to have risen 0.3%, without a slowdown since July, while the annual headline rate is expected to rise to 6.1%.
2. Playing chicken on the train and in the hospital
Anyone looking for real-world evidence of inflation Pressures can just as easily find them in the current state of labor relations.
A national rail strike is still looming as unions and employers continue their risky bets ahead of Friday’s deadline, when the mandatory “cooling off” period after the latest round of talks expires.
Two of the largest unions, BLET and SMART TD, are still waiting for an improved offer, while Amtrak has said it will start limiting services starting Tuesday, and carriers have said they will turn away some dangerous cargo starting Friday. , by not being able to guarantee the minimum levels of personnel necessary for security.
Separately, some 15,000 Minnesota nurses began a three-day strike Monday seeking a 27% pay raise spread over three years. It is believed to be the largest strike by private sector health care workers in US history.
3. Stocks rise as Oracle beats, Peloton cleans house
US stock markets are extending their gains ahead of the big inflation report to follow, and the market rallied ahead of the data on confidence that the worst of the price rise is over.
At 06:15 ET (10:15 GMT), they were up 136 points, or 0.4%, while and were online. All three major cash indices had risen as much as 1.3% on Monday.
Supporting the mood is Monday from Oracle (NYSE:), which confirmed a pattern of strong corporate investment. Also in the spotlight later will be Peloton (NASDAQ:), which announced a major announcement after the bell, ousting chairman and founder John Foley along with the company’s legal and business directors. Chief Executive Officer Barry McCarthy told a conference Monday that he had “stopped the bleeding” at the maker of connected fitness bikes.
4. Russia has a new headache on its southern flank
Pressure on Russian President Vladimir Putin’s government increased as Ukraine claimed it had recaptured a further 500 square kilometers of territory in the south of the country, adding to some 6,000 square kilometers of gains around the eastern city of Kharkiv on last weekend.
On Monday, some two dozen local lawmakers in St. Petersburg and Moscow publicly called for Putin’s ouster in a rare public display of defiance. Pressure is also mounting from hard-line nationalists, as well as veteran Communist Party leader Gennady Zyuganov, who support a mass mobilization. That is something Putin has carefully avoided so far.
The effect of the war in Europe was fully shown earlier, when the German economic sentiment index sank back to its .
Instability spread further across the former Soviet Union when Azerbaijan, one of the countries with which the EU has tried to break its dependence on Russian gas, launched artillery attacks on neighboring Armenia, which has historically been guaranteed Russian security.
The renewed fighting further complicates the geopolitical situation as Putin prepares to meet his Chinese counterpart Xi Jinping later this week.
5. Oil rises while the dollar falls; OPEC report in the spotlight
Crude oil prices rose in line with the broad improvement in risk sentiment (which was also reflected in another drop in the – now almost 3% below its peak last week).
The main events for the market will be the OPEC release, which is due in the next few hours, and last week’s release at 16:30 ET.
Separately, Reuters previously reported that production in the Permian Basin will reach an all-time high in August as high crude prices spur more drilling.
futures were up 1.1% at $88.77 a barrel, while they were up 1.1% at $95.04 a barrel.