Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Cooler-Than-Expected CPI Fails to Heat Up the Market

By Zacks Investment ResearchStock MarketsSep 14, 2021 09:15PM ET
Cooler-Than-Expected CPI Fails to Heat Up the Market
By Zacks Investment Research   |  Sep 14, 2021 09:15PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Even a cooler-than-expected CPI report couldn’t snap the market out of its September slide, as the major indices resumed this month’s downward trajectory on Tuesday after a mostly positive start to the week.

The Dow plunged 0.84% (or about 293 points) to 34,576.46, while the S&P slipped 0.61% to 4441.28. Not only did these indices fail to add onto Monday’s advances, but they lost more than was gained yesterday. So we’re already in the red for this week with the Dow and NASDAQ each lower for the sixth time in the last seven sessions.

The NASDAQ isn’t much better. It declined 0.46% (or about 70 points) to 15,035.42, which marks its fifth straight negative close. Apple’s (AAPL) iPhone 13 event, which also introduced new iPads and new Apple (NASDAQ:AAPL) Watch series, didn’t provide much of a boost for the company. Shares dipped nearly 1% today.

Investors have been eagerly awaiting today’s CPI report. And you know what? It ended up being slightly better than expected. VERY slightly.

Consumer prices rose 5.3% in August year over year, which was in-line with expectations and a tad better than July’s 5.4% rise. It was up 0.3% month on month, which was also more moderate than July’s 0.5% advance over June. Core CPI, which excludes energy and food costs, came in cooler than expected as well.

These readings are still extremely high, but you’d think that a market so concerned with rising inflation would react more favorably to a lighter-than-feared CPI report. Even a 0.1% improvement could be seen as supporting the Fed’s forecast that such rising prices are transitory.

Unfortunately, the report doesn’t shed any light on the market’s main problem at the moment, which is the delta variant and its impact on the economic recovery. Next week’s Fed meeting is growing more important every day.

Today's Portfolio Highlights:

Stocks Under $10: The staffing business is booming right now, as evidenced by the space being in the top 10% of the Zacks Industry Rank. This portfolio’s best performer at the moment is easily the staffing firm Cross Country Health (CCRN), which has soared nearly 150% since being added last November. Given such success, Brian decided to pick up another name from this area on Tuesday by buying RCM Technologies (RCMT). This Zacks Rank #2 (Buy) topped expectations three times and matched once in the past four quarters. The most recent beat was more than 266%. Full year earnings and revenue growth is seen at nearly 144% and 22.5%, respectively, with more growth expected next year. In addition to picking up RCMT, the portfolio also sold Ammo (POWW) and Babcock (BW) because these names were “beyond the point of no return”. Read the full write-up for more on all of today’s action. In other news, Diana Shipping (NYSE:DSX) made the top movers scoreboard yet again by advancing 3.7% on this down day and remains one of the best performers over the past 30 days by surging 42.3%.

Zacks Short Sell List: Two positions were swapped in this week's adjustment. The portfolio short-covered Amazon (NASDAQ:AMZN, +1.7%) and Intuit (NASDAQ:INTU), and then replaced those names by adding AppLovin Corp. (APP) and Certara (CERT). Learn more about this emotion-free portfolio that takes advantage of falling and volatile markets by reading the Short Sell List Trader Guide. By the way, this portfolio had the top performer on Tuesday as the short in Las Vegas Sands (NYSE:LVS) advanced nearly 10%. The short in StoneCo (STNE) also made the Top 5 by climbing 3.7% in this rough session.

Options Trader: "After hitting new all-time highs just two weeks ago, stocks have pulled back a bit as the market tries to consolidate recent gains.

"It will continue to look for direction while it sorts thru concerns over inflation, supply and worker shortages, and the effects the delta variant will have on growth moving forward.

"Traders will also be watching developments on the infrastructure bill, the budget framework bill, and the taxes to go along with it. We’ve already heard some of the proposals. Taxes, of course, are growth suppressors, while stimulus is a growth driver. But we’ll have to see the details.

"In the meantime, the economy continues to expand. And at an impressive pace. Maybe less than earlier forecast, but still very impressive."
-- Kevin Matras

Have a Good Evening,
Jim Giaquinto

Recommendations from Zacks' Private Portfolios:

Believe it or not, this article is not available on the website. The commentary is a partial overview of the daily activity from Zacks' private recommendation services. If you would like to follow our Buy and Sell signals in real time, we've made a special arrangement for readers of this website. Starting today you can see all the recommendations from all of Zacks' portfolios absolutely free for 7 days. Our services cover everything from value stocks and momentum trades to insider buying and positive earnings surprises (which we've predicted with an astonishing 80%+ accuracy). Click here to "test drive" Zacks Ultimate for FREE >>

Zacks Investment Research
Cooler-Than-Expected CPI Fails to Heat Up the Market

Related Articles

JFD Team
Hang Seng Heading for a Lower Low? By JFD Team - Sep 24, 2021

Hong Kong’s Hang Seng traded lower yesterday after meeting resistance at 24805 levels. Overall, the index remains below the tentative downside resistance line drawn from the high...

Cooler-Than-Expected CPI Fails to Heat Up the Market

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Az Jak
Az Jak Sep 15, 2021 1:45AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email