Institutional Insights: Goldman Sachs, SP500 Scenarios For CPI Reaction
Institutional Insights: Goldman Sachs, SP500 Scenarios For CPI Reaction
GS CHART OF THE DAY: CPI PREVIEW
GS Research: We expect a 0.28% increase in September core CPI(vs. 0.2% consensus), corresponding to a year-over-year rate of 3.16%(vs. 3.2% consensus).
•Our September core CPI forecast is in line with the pace of the August reading and above the +0.13% average of the three readings before that. The softer readings were aided by large declines in the airfare component—which declined 3.4% on average—and the used cars component—which declined 1.1% on average. In September, we expect an increase in airfares (+0.5%)—reflecting a modest boost from residual seasonality—and an increase in used car prices (+1.0%)—reflecting a rebound in auction prices.
•We highlight two additional key component-level trends we expect tosee in this month’s report.
1.We expect another firm increase in car insurance prices,reflecting continued, albeit decelerating increases in premiums.
2.After the outsized increases of the last couple of months, weexpect shelter inflation to moderate, with owners’ equivalent rentincreasing 0.35% and primary rent increasing 0.31%.
•Going forward, we expect monthly core CPI inflation around 0.2-0.25%for the rest of the year
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!