Daily Rundown: September 12

BOB LANG: Good morning Action Alerts Plus subscribers. It's September 12th, 2022. It's time for our rundown. We've got a lot to cover. Big week coming up here, so let's get to it right now.

So Friday saw the markets move up sharply higher all day long, and went right through resistance, which was the 50-day moving average which we were looking at perhaps was going to hold the markets, but it certainly didn't do that. Some very impressive statistics finished up on the day on Friday which included things like very, very strong breadth. It was a 90% up volume day on the session. We saw volatility receding again after some news came out that were somewhat positive on economic data, and we have some more of that coming up later on this week. We'll talk about that in a few minutes.

We also saw new highs eclipsing new lows by a slight amount on Friday, but still was significant, and we'll see if that trend continues along as well, too. So I should also mention that the breadth once again was extremely strong volatility reflected that, and also put-call ratios were down. So it was all in all, it's just a real strong day for the bulls. They won the week as they managed the first up week in about four weeks, so we'll see if that can continue.

So far today we see the S&P 500 up a little more than 1% today. The other indices are strong as well, too. The Russell 2000 up nicely as well. It lagged a little bit last week towards the end of the week. It did get dragged up higher, but it did lag, so we'll see if that makes up some ground during this week.

As far as the economic data is concerned, of course, we've got a big CPI number coming out tomorrow morning before the open. The street and the market is looking for basically a flat number. 0.06 is what the Cleveland Fed has forecasted for their now casting of the CPI number. We have a PPI number coming in on Wednesday, but of course, tomorrow's number is the big one that we'll be watching. We'll see if we can get a second consecutive lower print on the CPI number.

The only problem is, the other fly in the ointment so to speak, is that the year over year number is expected to be well over 8%, and the Fed is watching that very, very closely. They basically craft policy around the year over year numbers, but of course, they have to acknowledge and recognize that if there is some a trend in the CPI number that is trending downwards, they do have to acknowledge that and possibly make some adjustments to their current policy, which of course, we know is very hawkish.

Now the FOMC, Fed Funds futures, is looking at about an 88% chance of a 75 basis point rate hike next week. Next week's meeting is going to be Tuesday and Wednesday of the 20th and 21st of September. We'll also get the new projections for the rest of 2022 along with for 2023, and maybe even some 2024 projections as well.

One of the Fed governors came out recently and said that they did not see inflation hitting their target of 2% until 2025, so we're talking about two years plus of higher interest rates until they get to their targeted goal of about 2%. So we all have to understand and deal with that, and it doesn't mean the bear market is going to be raging on through 2024. Probably not. We'll eventually get that higher inflation priced into the markets, but as of yet we don't see it quite happening that way.

Lastly, I want to share with you the fact that Chris and I are going to be doing our weekly audio. That will be a little bit later on today. Should be out later on today for subscribers and possibly Tuesday morning. So it's something that we've done recently, and we're talking a little bit about markets, the economy, that stuff. So I suspect we have some good things to consider with all the news that's coming out later on this week.

We do have some earnings coming out later on today with Oracle, and later on in the week with Accenture, so there's some big earnings coming out. And let's not forget big options expiration week coming in on Friday, and we also do have volatility-- the VIX Futures are expiring on Wednesday morning, so we do have some potential for some explosive movements up and down the markets this week.

So that's going to be it. I'm going to wrap it up. Have a great day everyone, and we'll see you tomorrow.