Inventory futures rise as Wall Road awaits key inflation report

European stocks edged higher Tuesday morning as global markets braced for the latest US inflation data.

The pan-European Stoxx 600 was up 0.3% in early trade, with food and beverage stocks up 0.8% to lead gains as most sectors and major bourses surged into positive territory. Retail shares fell 0.4%.

CNBC Pro: Do ​​you want to invest in real estate? These REITs are among analysts’ favourites

Real estate investment trusts — or REITs — are back in the limelight after a volatile year for many asset classes.

Analysts at Morgan Stanley and Citi are highlighting REITs from two sectors that they say could outperform the broader market and remain resilient in a recession.

CNBC Pro subscribers can read more here.

— Wheat Tan

Fed actions this month may be “non-event” for asset prices, says Ameriprise

According to Ameriprise Chief Markets Strategist Anthony Saglimbene, the market is already pricing in the upcoming September Federal Reserve meeting, when the central bank is expected to hike interest rates.

“In our view, central bank action this month is likely a non-event for asset prices,” he wrote in a note Monday. “However, the economic data coming in over the coming weeks and months and its impact on policy action next year could play a much more significant role in shaping stock direction over the medium term.”

Markets now expect the Fed to hike rates by 0.75 percentage point, meaning assets may not move much if that’s the central bank’s decision. A CPI report on Tuesday that is in line with expectations may not move the needle either.”

“Unless inflation numbers have changed significantly more than expected over the past month, including Wednesday’s Producer Price Index (PPI) update, we believe a 75 basis point hike by the Fed is essentially locked in at this point,” he said.

– Carmen Reinicke

Recovery rally is likely bear market recovery, says Wells Fargo

The recent recovery rally in stocks is likely another bear market upleg, and investors should brace for more volatility in the future, according to Wells Fargo.

“For the year, the outperformance of defensive, high shareholder payouts, high-quality and low-valued stocks reminds investors of the hallmark of a bear market,” global portfolio and investment strategist Chao Ma wrote in a note Monday.

Such rallies happen in almost every bear market, and many are quickly reversed, leaving investors with regret, they added.

“Although it is difficult to predict the bottom of a bear market, historical market bottoms have typically been predetermined by overly dovish market sentiment and a sign of eventual improvement in underlying economic or market problems,” Ma said. “We believe that we are not quite there in both respects.”

In the meantime, Ma recommends investors look for defensive stocks with low volatility, high dividends, and share buyback yields. He also says investors should go for high-quality names with profitability and leading market shares and an affordable market price.

– Carmen Reinicke

US stock futures rise ahead of Tuesday’s CPI report

US stock futures were higher Monday night as Wall Street eyes the August CPI report due Tuesday morning. The report will give investors an update on the inflation situation in the US and is one of the last data the Federal Reserve will see ahead of its September meeting.

Dow Jones Industrial Average futures were up 55 points, or 0.17%. S&P 500 and Nasdaq 100 futures were up 0.18% and 0.21%, respectively.

– Carmen Reinicke

Comments are closed.