Weekly Market Outlook: U.S. CPI Data, ECB Rate Decision, and Apple’s Product Launch

Insights - This week, investors will focus on the U.S. August CPI. Following last week's disappointing non-farm payroll report, a continued decline in CPI could pave the way for a Fed rate cut in September. The European Central Bank (ECB) is expected to announce a 25 basis point rate cut on Thursday. Additionally, the first televised debate between candidates Kamala Harris and Donald Trump will take place on Wednesday, focusing on domestic economic policies. Apple (AAPL-US) will host its fall product launch event at September 9th, 2024, at 1PM ET, with the iPhone 16 series expected to be unveiled. Oracle, Adobe, and GameStop will also report earnings this week.

Last week, the U.S. reported a non-farm job increase of 142,000 for August, below the expected 165,000, with previous months' data revised down, indicating a slowing labor market. The U.S. manufacturing PMI rose slightly to 47.2, remaining below 50 for the fifth month, raising concerns about economic weakness. The Bank of Canada cut its policy rate by 25 basis points to 4.25%, marking its third cut this year. Broadcom (AVGO) reported a net profit of $1.571 billion for the first three quarters of fiscal 2024, down 85% from $10.558 billion last year.

Key Economic Events This Week

• U.S. August CPI Data

The U.S. will release its CPI report on Thursday (12th), with expectations for a slight decline in the year-on-year CPI to 2.6%. Core CPI is expected to remain steady at 3.2%. Despite a drop in the unemployment rate, the labor market remains weak.

Analysts believe that the Fed is unlikely to initiate a 50 basis point cut and is more likely to cut by 25 basis points in September.

• ECB Rate Decision: Market Expects Two More Cuts This Year

The ECB will announce its rate decision on Thursday, with markets anticipating a 25 basis point cut. Recent data showed the eurozone GDP grew by 0.2%, lower than the initial estimate of 0.3%, as weak investment continues to hinder growth.

The market expects at least two more rate cuts from the ECB this year, reducing the deposit rate from 3.75% to 3.25%.

• Apple's Fall Product Launch: iPhone 16 Expected

Apple will hold its "It's Glowtime" event on Monday, with expectations to unveil the iPhone 16, AirPods 4, and updated Apple Watch models. Analysts are focused on whether the iPhone 16 will drive a "super cycle" upgrade.

Goldman suggests that this year's Apple launch event could feature four surprises: a price increase for the new iPhone, an earlier-than-expected release of "Apple Smart" features and apps, a new iPad launch, and better-than-expected carrier promotions.

Major Events:

Tuesday: Apple's product launch event

Thursday: ECB President Lagarde's monetary policy press conference

Friday: Bank of Russia rate decision

Key Economic Data:

Monday: U.S. August New York Fed 1-Year Inflation Expectations

Wednesday: U.S. August Unadjusted CPI Year-on-Year

Thursday: Eurozone ECB Deposit Facility Rate until September 12

Key Earnings Reports:

Monday: Oracle (ORCL.N)

Tuesday: GameStop (GME.N)

Thursday: Adobe (ADBE.O)