Text: Yan Xiang, Shi Lin
Key conclusions:
Event: United States CPI in September was 2.4% year-on-year, expected 2.3%, previous value 2.5%; CPI was 0.2% month-on-month, expected 0.1%, and the previous value was 0.2%; The core CPI was 3.3% year-on-year, with the expected and previous values both 3.2%; The core CPI was 0.3% month-on-month, with an expectation of 0.2% and a previous value of 0.3%. Investment highlights: Energy prices weakened sharply, driving the CPI data in September downward, but food and core goods items increased sharply, and the core services were not weak, making the CPI decline lower than expected, and the core CPI did not weaken: The CPI continued to weaken in United States September compared with the previous value (2.6% → 2.4%), but it was mainly driven by energy items, and other sub-items rebounded significantly. In terms of main sub-items, food items strengthened marginally (0.1% → 0.4%); The month-on-month decline in energy items widened (-0.8% →-1.9%), mainly driven by the decline in oil prices in early September. Core goods turned positive (-0.2% → 0.2%), of which clothing (0.3% → 1.1%) and transportation products (-0.3% → 0.3%) increased significantly month-on-month, and the inflationary pressure on the commodity side was highlighted again; Core services remained unchanged from the previous month (0.4%), and the service sector remained good, corresponding to the sharp increase in employment in the service sector in September, of which housing rents narrowed month-on-month (0.5% → 0.2%), but medical care services (-0.1% → 0.7%) and transportation services (0.9% → 1.4%) expanded month-on-month. The larger-than-expected inflation data, together with the previous non-farm payrolls data, reflects the recent strength of United States economic data, and there is renewed upward pressure on inflation in the future, which may hinder the Fed's decision-making: (1) The United States economic data since August has strengthened again, largely due to the reflexivity of its financial conditions: from historical experience, financial conditions are about a quarter ahead of United States economic fundamentals, "United States economic downturn→ trade recession/interest rate cut in advance→ U.S. Treasury interest rates down→ financial conditions ease→ United States economic upside" Appeared several times in the past two years. Since May, the interest rate on U.S. bonds has fallen by about 100BP, which objectively has the effect of cutting interest rates in advance; (2) September inflation or the low point of the year, and there may be rebound pressure in the future: According to the assumption of 0.2% month-on-month, inflation in September or the low point of the year, and the subsequent rebound is likely to rebound, the low base from November to December last year, as well as the recent re-strengthening of oil prices and the rebound of economic fundamentals, all bring upward pressure on inflation, which means that the inflation factor in the Fed's decision-making may expand again; The phased setback of easing trading has a relatively greater impact on U.S. bonds, which is relatively good for U.S. stocks and the U.S. dollar, but it is also necessary to be vigilant against risks: (1) Easing trading frustration: After the release of the unexpected inflation data, the market expectation of interest rate cuts continued to fall, the U.S. bond interest rate continued to rise, and the U.S. dollar strengthened; (2) U.S. bonds: In the context of the falsification of recession transactions and the strengthening of economic margins, short-term or partial shocks, and another downside needs to see the weakening of United States data, which still needs to be observed; (3) U.S. stocks: Recession trade falsification + this round of interest rate cuts is closer to the precautionary interest rate cut script, which is generally good for U.S. stocks, but in the short term, it is necessary to be wary of the pressure of high valuation and excessive market concentration; (4) US dollar: short-term or stable, limited room for further downside. The resilience of the United States economy is still strong, and the world's major central banks have started to cut interest rates, which has brought support to the dollar.
Risk warning: United States economic resilience exceeds expectations, United States inflation rebounds again, and the Federal Reserve is hawkish.
This article is from the report "Core Inflation Has Not Cooled: A Review of United States CPI Data for September" released by Huafu Securities Research Institute on October 11, 2024.
Analyst:
燕翔， S0210523050003
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