Full CPI And Market Reaction Preview: How Much Cooler
The stock market is reacting negatively to a strong jobs report, as it increases the likelihood of the Federal Reserve increasing interest rates.
The CPI report on Wednesday will have a strong impact on risk assets, even though it may not have the same market impact as recent CPI prints, since the attention has shifted to the credit crunch, and the economic contraction that is resulting from the massive bank deposit run in the region. Goldman said today that the CPI could move stocks up or down by as much as 2 percent.
This report is divided into three sections: i. what the consensus expects, ii. key areas to focus on and possible surprises, and iii. how the market might respond.
I. Consensus Expectations