Analysis: AWK

Join the latest Action Alerts PLUS portfolio conversation/podcast as co-portfolio managers Bob Lang and Chris Versace discuss what they will be watching in this jam-packed week of inflation data, volatility expiration, August Retail Sales, and triple-witching options expiration.

Both agree the August Consumer Price Index will be the inflation report to watch and even if we see a better-than-expected print for August, the Fed isn't likely to back down from a 75-basis point rate hike next week. Bob explains why he thinks the fed funds rate could remain at elevated levels for far longer than many are contemplating.

That potential adds to why Chris is focused on 2023 earnings expectations for the S&P 500, especially since the current figures point to almost 8% growth vs. 2022 despite rising concerns of inflation unfolding. 

The two also discuss how the current water crisis in Mississippi underscores the portfolio's investment rationale in American Water Works (AWK) , why expected market volatility should continue to drive options volumes in the coming months, and how a potential rail strike could be another risk that throws the economy off track.