September 2023 Key Events: Inflation Data, iPhone 15 Launch, and Labor Negotiations

As September kicks off, investors brace themselves for a week packed with crucial events. Key economic data on inflation, Apple's anticipated product launch, and looming labor negotiations deadlines are set to dominate the headlines.

Inflation Insights

Wednesday will bring the release of the Consumer Price Index (CPI) for August, a pivotal economic indicator. Projections suggest that headline inflation will continue its upward trend, driven in part by rising oil prices.

Apple's Moment

On the corporate front, Tuesday marks Apple's eagerly awaited fall event. Anticipation is high, with expectations of new iPhone models, Apple Watches, and the introduction of a new charging port for most devices.

Labor Negotiations Deadline

A potentially contentious labor negotiation deadline looms on September 14. The United Auto Workers face off against major automakers Ford, General Motors, and Stellantis. Workers have raised the specter of a strike if a new deal isn't reached by Thursday.

Market Performance Recap

Last week, markets saw continued volatility that began in August. Concerns about persistent inflation, particularly following an August services sector report, contributed to a mid-week dip in stocks. The tech-heavy Nasdaq took the most significant hit, dropping nearly 2% during the holiday-shortened trading week. The S&P 500 and Dow Jones Industrial Average also experienced declines of 1.1% and 0.4%, respectively.

Inflation Focus

Inflation will be a focal point this week, with Wall Street preparing for another uptick in headline inflation. Economists forecast a 3.6% rise in headline inflation from the previous year, surpassing July's 3.2% increase. A monthly increase of 0.6% is anticipated, with higher energy prices expected to be a significant factor.

Looking at core inflation, which excludes food and energy categories, a 4.3% rise over the previous year is projected for August, a slight slowdown from July's 4.7% increase. Monthly core price increases are expected to be around 0.2%.

The Federal Reserve's emphasis on core inflation gives confidence to economists and investors that there won't be a rate hike in September. As of Friday, markets were pricing in a 92% likelihood that the Fed will keep interest rates steady after their September 19-20 meeting.

Jefferies economist Thomas Simons noted, "We do not expect that [CPI data] will tip the scales towards a hike, given the mixed message delivered by the other employment reports and last month's inflation data."

Other Economic Highlights

Aside from inflation data, the August retail sales report will also be closely watched. Economists are anticipating a modest 0.1% increase, down from July's 0.7% surge. Additionally, data on producer prices, small business sentiment, and the weekly report on initial filings for unemployment insurance will be on the economic calendar.

iPhone 15 Launch

Apple's product unveiling on Tuesday is poised to be a market-moving event. This is a critical juncture for the tech giant, particularly in light of a recent dip in Apple's stock following Chinese government directives to avoid using iPhones at certain agencies. The release of a high-end phone by China's Huawei added further pressure.

Analysts, however, suggest that the market's reaction might have been overstated. The spotlight will be on "Wonderlust," where Apple is expected to reveal updates to its iPhone lineup, introduce new Apple Watches, and unveil USB-C charging ports across its device range.

Morgan Stanley analyst Erik Woodring commented, "Historically, the iPhone launch has been a sell-the-news event." Woodring also emphasized the potential for both unit and average selling price growth in the upcoming iPhone cycle.

Weekly Economic Calendar

Monday:

• No notable economic news.

• Earnings: Bowlero (BOWL), Casey's (CASY), Oracle (ORCL)

Tuesday:

• NFIB Small Business Optimism, August (Expected: 91.3, Prior: 91.9)

• No notable companies set to report earnings.

Wednesday:

• Consumer Price Index, month-over-month, August (Expected: +0.6%, Prior: +0.2%)

• Core CPI, month-over-month, August (Expected: +0.2%, Prior: +0.2%)

• CPI, year-over-year, August (Expected: +3.6%, Prior: +3.2%)

• Core CPI, year-over-year, August (Expected: +4.3%, Prior: +4.7%)

• Real average hourly earnings, year-over-year, August (Prior: +1.1%)

• Earnings: Cracker Barrel (CBRL)

Thursday:

• Initial jobless claims (Prior: 216,000)

• Retail sales, month-over-month, August (Expected: +0.1%, Prior: +0.7%)

• Retail sales ex auto and gas, August (Expected: 0.0%, Prior: +1%)

• Producer Price Index, month-over-month, August (Expected: +0.4%, Prior: +0.3%)

• PPI, year-over-year, August (Expected: +1.5%; Prior: +0.8%)

• Core PPI, month-over-month, August (Expected: +0.2%, Prior: +0.3%)

• Core PPI, year-over-year, August (Expected: +2.6%; Prior: +2.8%)

• Earnings: Adobe (ADBE), Lennar (LEN)

Friday:

• Import prices, month-over-month, August (Expected: +0.3%, Prior: +0.4%)

• Export prices, month-over-month, August (Expected: +0.3%, Prior: +0.7%)

• Empire Manufacturing, September (Expected: -10.7, Prior: -19)

• Industrial production, month-over-month, August (Expected: +0.1%, Prior: +0.5)

• University of Michigan consumer sentiment, September, preliminary (Expected: 69.4, Prior: 69.5)

• No notable companies set to report earnings.

This week promises a whirlwind of economic activity and corporate developments, ensuring investors will be on high alert for potential market shifts.

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