Key Inflation Data Released Today. What are Prices Doing?

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The CPI was reported this morning. CPI is the Consumer Price Index, and it provides insight into how fast prices are changing across the U.S. economy. It’s number shows it rose 2.9% in July from this time a year ago.

That was the lowest reading since March 2021.

Tomorrow’s Initial Jobless Claims report and the US Retail Sales report are going to give a further viewpoint on what the Fed, and therefor, US economy is dealing with.

This will present us all with the challenge of recognizing the trend of the market and if it continues higher as it has done so in a decent fashion post its prior sell off or not.

Economists are saying the Housing market/sector is the primary catalyst holding things back right now. It is why inflation is staying elevated over the Fed’s target.

Then there is the view that when interest rates rise, home prices suffer. Well then wouldn’t that means if the Fed starts lowering rates in September housing should be ok or come back?

No matter what camp you are on, either the housing sector is under pressure, or it will be fine once we start cutting rates you can go to the housing sector to research the ETF’s or individual stocks, like CTRE, TOL, KBH, PHM or LGIH to name a handful.

My tools provide the means for people to go search up sectors and stocks within those sectors (Major or Minor sectors) to build a list to start your options trading research on. You will find the instructions on how to find this sector research capability in my tools in the Tools and Observations sections of this report.

Markets in Focus: Sector SPDR (SPY)

Can the SPY make it back up to $550 or higher.  That would be great for market bulls.

As long as their isn’t any ‘out of the blue’ surprise on the economic front that may spook the FOMC and they come through with an interest rate cut in September which isn’t deemed too small or too big, the updraft in equities could continue.

If I were to educate people on how I would trade I would say carefully.

What does carefully means?  Instead of taking my usual position-size and having as much at risk per trade as I usually do, I maybe consider a lesser risk / lesser position sized option trade and or maybe a lesser quantity of trades.

Tools and Observations

Here is an image of the inflation numbers on various parts of the economy excluding food and energy provided in an article by cnbc.com.

The reason I am showing you this list and NOT including the list on all the various foods (home and away from home) is I and my team don’t often trade various foods/food commodities nor options based on them.

We do however, trade companies and or ETF’s based on sectors of non-food items belonging in sectors like Consumer Discretionary, Healthcare or Household goods and personal care services.

Take a look a the list supplied here today and you can see where the increase in the cost of these goods and services are happening.

One can look at this list and say iof the cost are rising in a certain area, rather than be discouraged about the price increasing of those see if there is a stock or an ETF or sector where that stock lives and consider trading it or options on it to make the money you need to buy those items.

For instance if you look at Motor Vehicle Insurance seeing the largest increase consider looking into auto insurers.  Progressive coems to my immediate mind.  That is ticker symbol PGR.

Delivery Services?  Consider looking in to Fedex Corp (FDX) or United Parcel Service (UPS)

Care of the elderly?  Hospital and related services start researching stock sin the Healthcare field that specialize in those specific areas of Healthcare.

In our suite of options tools I have a place where people can go an research up specific sectors and then go further into looking at stock IN those sectors.

Login > Stocks Stock Analysis > Sectors

Here is a place one can search up a grouping of stocks – mauybe you don’t known what sector a stock you like to trade is in.

Maybe you want to find more stocks of that same type to research trade opportunities on.

You can see in the left hand corner of the page the boxes where the Major and Minor sectors are listed.

You can then have your settings for how you want these items listed.

What more I like is at the bottom of the page you can have a list of stocks and in that list it will show you what sector, (Major or Minor), it is actually in.

It lists / has two columns, one for the Major sector and one for the minor sector.

See below:

One can then go to etfdb.com and look up what sector ETF you may want to research and trade or trade options on.

An example.  Did you know there was an ETF for airline stocks?  There is – it’s ticker is JETS and it is the US Global Jets ETF.  There is also a levereged one for it called JETU.

JETS is on the tools as it is optionable JETU is not.

This is a nice feature to have in the tools provides as it provides us all with quick access to see what stock or sector of stocks are doing well or not so well and then we can pursue our options research on those.

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