Consumer Prices, Oil, the Magnificent Seven

Rising energy prices pushed the Consumer Price Index (CPI) to its largest monthly change in over a year but, below the surface, the increase in core CPI remained subdued. The price of oil is now at its highest level of the year despite rising U.S. production. It’s harder to obtain credit than a year ago. Small businesses are less optimistic about future sales. A majority of fund managers think the Federal Reserve is done hiking interest rates. U.S. imports. Index concentration. The magnificent seven.

1. Rising energy costs can impact core CPI with a lag but the Federal Reserve is unlikely to react to short-term chances in energy prices:

Source: @TheTerminal, Bloomberg Finance L.P.  

2. Cuts to OPEC (Organization of the Petroleum Exporting Countries) production are more than enough to offset the rise in U.S. production:

Source: The Daily Shot 9/14/2023

3. U.S. oil and gasoline stocks rose slightly last week, but they remain near the bottom of their 5-year range:

Source: The Daily Shot 9/14/2023

4. Notably, the banking crisis earlier this year had little impact on consumers perception of credit availability:

Source: Federal Reserve Bank of New York  

5. Small business owners reported weaker sales over the past three months, and are similarly pessimistic about future sales:

Source: The Daily Shot 9/13/2023

6. The Federal Reserve is expected to keep short-term rates unchanged during their upcoming meeting:

Source: BofA Global Research  

7. News that imports from Mexico now exceed imports from China obscured that the two countries are only 30% of U.S. imports:

Source: @WSJ   Read full article  

8. Apple’s weighting in the S&P 500 is the largest for a single company since at least the early 1970s:

Source: Goldman Sachs; @dailychartbook  

9. 2023 has been an amazing year for a small subset of stocks and an average one for everything else:

Source: Goldman Sachs; @dailychartbook