Stock Market Update

The S&P 500 futures are up seven and are trading 0.1% above fair value, the Nasdaq 100 futures are up 27 points and are trading 0.1% above fair value, and the Dow Jones Industrial Average futures are up 15 points and are trading 0.1% above fair value.

Total CPI was up 0.2% month-over-month in July, as expected, and core-CPI, which excludes food and energy, was up 0.2%, also as expected. The index for shelter was up 0.4% month-over-month and accounted for nearly 90% of the increase in the all items index.

On a year-over-year basis, total CPI was up 2.9%, versus 3.0% in June, and core-CPI was up 3.2%, versus 3.3% in June.

The key takeaway from the report is that it points to ongoing disinflation; hence, it won't change the market's belief that the Fed will cut rates by 25 basis points in September even though CPI inflation is comfortably above the Fed's 2% goal, which is oriented around PCE price inflation that is currently at 2.5%.

Treasury yields moved slightly higher in response. The 10-yr note yield, at 3.83% before the data, sits at 3.85% now. The 2-yr note yield, at 3.93% before the data, sits at 3.97% now.