October CPI Stares Down Wall Street
Grant Calloway breaks down pre-market action as investors await the October CPI print following a massive Dow rally and hot jobs data. Plus, a look at early movers like GE Vernova, Fox, and PepGen, cross-asset shifts in crude and yields, and a full rundown of today's Fed speakers and earnings.
Chapter 1
CPI Morning and the Tape
Grant Calloway
Welcome to the Bull Sheet podcast. I'm Grant Calloway. Yesterday the Dow jumped 1,104 points, closed at 52,389, and got back above where it finished on Election Day. This morning the tape splits right down the middle, and everybody's staring at one number at 8:30 Eastern. Tighter than a drum, this market.
Grant Calloway
The headline is October CPI, out at 8:30 a.m. Eastern. Last month's reading was 0.6 percent headline, 3.7 percent year over year, and core was up 0.3 percent on the month. Consensus looks for around 0.3 percent headline and 0.2 to 0.3 percent core. Now stack that on Friday's jobs report. Payrolls rose 165,000 against a forecast of 59,000, and unemployment fell to 4.1 percent. Hot jobs, then hot inflation, and the talk of a December Fed hike gets very loud. A cool print, and the Fed can sit still. That's the whole morning in two sentences.
Grant Calloway
The tape. Dow futures are up about 160 to 178 points, call it a third of a percent. S&P futures are flat near 7,575. Nasdaq 100 futures are down about a third of a percent, still nursing that chip hangover. Overseas, Japan's Nikkei rallied 2.87 percent, Korea's Kospi jumped 4.39, and Hong Kong was roughly flat. Europe's firm, with the DAX up about 1.2 percent and the CAC about the same.
Grant Calloway
Cross-asset. Crude's sliding again. WTI is around 84 to 85 dollars, Brent around 89 to 90. Yields are going the other way, with the 10-year near 4.9 percent and the 2-year around 4.6. Gold's down more than one percent near 4,070, the dollar index is firmer around 101.9, and Bitcoin's off about one percent to a bit over 74,000. Everything's moving, which usually means nobody knows anything yet.
Grant Calloway
Movers, and not a megacap in the first batch. GE Vernova is down about 8 percent premarket. Caterpillar's off about 4.6 after leading yesterday's cyclical charge. NRG Energy is down about 3.5. Fox is up nearly 6 percent and Take-Two's up about 4 after earnings. In biotech, PepGen is up more than 120 percent on heavy early volume, while Legend Biotech fell about 13 after its quarter. eToro slid nearly 8 on results. Citigroup's a touch higher. And Nvidia's down again, as its board investigates CEO Jensen Huang, with Intel off about 3.5.
Grant Calloway
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Chapter 2
Bull vs. Bear and On Deck
Grant Calloway
Bull versus bear. The bull first. Monday showed there's money waiting to buy dips. Oil's falling hard, and that's relief for margins and for wallets. If CPI lands in line or cooler, the Fed can pause in December, and the year end rally has a runway.
Grant Calloway
Now the bear. S&P futures are flat after the best day since April, and Nasdaq's slipping. Ten-year yields are pushing back toward 4.9 percent. The midterm results put regulatory clouds over data center power and AI spending. And if inflation comes in sticky on top of Friday's blowout jobs, a hike gets very hard to argue against. Wolfe Research's Chris Senyek says markets will stay very news flow driven.
Grant Calloway
Where do I land? I've traded through two crashes, and I don't trust one big green day. The bounce was real, but the bear owns the calendar this morning. Jay Hatfield of Infrastructure Capital said it plainly: it's not like the coast is clear. I agree. Respect the print first, opinions second.
Grant Calloway
On deck. NFIB small business optimism came in at 97.8. CPI hits at 8:30 Eastern. Dallas Fed's Lorie Logan speaks at 10:50, the New York Fed household debt report is at 11, and the EIA energy outlook is at noon. The 10-year note auction is at 1 p.m., then Fed speakers Jeff Schmid at 1:30 and Vice Chair Michelle Bowman at 3:30. Earnings: TransDigm before the open, and CoreWeave after the close, in the middle of AI scrutiny. Alcon and Infineon report too.
Grant Calloway
What matters most today is that 8:30 print, and how yields react. Tune in tomorrow at 7 Pacific. And remember, the opening bell is the greatest four hundred milliseconds in capitalism, so don't blink. This podcast is for educational purposes only and is not investment advice.