Goldman Sachs senior market advisor Dom Wilson said on Tuesday that investors are preparing for the release of the US July CPI data on Wednesday, but as concerns about economic growth intensify, investors will also remain sensitive to other data this week.
According to the Futubull app, Goldman Sachs senior market advisor Dom Wilson said on Tuesday that investors are preparing for the US July CPI data release on Wednesday, but as concerns about economic growth intensify, investors will also remain sensitive to other data released this week.
Goldman Sachs expects the US core CPI in July to rise by 0.16% month-on-month, with a market consensus forecasting a 0.2% month-on-month and 3.2% year-on-year increase. This inflation data will provide a reference for the Fed's decision to start cutting interest rates in September. Traders have already priced this in.
However, Dom Wilson said that in addition to the US July CPI data, there are also more economic data to consider. "Given that the current major concern is the risk of economic growth, we can say that we are more sensitive to the retail sales and initial jobless claims later this week. Lower-than-expected retail sales data may be a greater obstacle to the current upward trend."
The slowdown in US non-farm payroll growth and rising unemployment rates in July led to a sharp drop in US stocks from their historic highs this summer. US stocks are currently in a recovery phase. During this process, the S&P 500 index and Nasdaq index rose for the fourth consecutive trading day on Tuesday, and the Dow Jones Industrial Average rose for three of the past four trading days.
Dom Wilson said: "After the extreme situation has been quickly alleviated, the market environment has become more difficult, but we are more optimistic about our forecast for the US core CPI than the market consensus we have seen. In terms of the possibility of economic recession, which our US economic team believes is 25%, the pricing of the tail risk of an economic recession may still be too high." "Therefore, as time goes by, the situation will further ease, but the market may need some time to feel comfortable about this. In the meantime, there may be more volatility surrounding economic growth data, especially the next few monthly jobs reports."
Editor/Emily