July CPI data comes in lower than expected on an annual basis

The Dow Jones Industrial Average edged higher Thursday, after the July consumer prices gained 3.2 per cent on an annual basis, less than the 3.3 per cent consensus from economists polled by Dow Jones.

On a month-to-month basis, inflation increased 0.2 per cent, in-line with estimates. The report also said real average weekly earnings were unchanged last month in another positive sign.

Still, the report had some indications of sticky inflation. Excluding food and energy, the so-called core July CPI reading was up 4.7 per cent on an annual basis, far above the Fed’s 2 per cent target. And headline inflation was above the 3 per cent annual rate in June.

Overall, the blue-chip average added 52.79 points, or 0.15 per cent, to finish at 35,176.15. The S&P 500 inched up 0.03 per cent to 4,468.83. The Nasdaq Composite rose 0.12 per cent to close at 13,737.99.

All three indexes climbed more than 1 per cent earlier in the session, with the Dow up more than 450 points. Despite Thursday’s gains, the Nasdaq Composite and S&P 500 are on pace to end the week lower by 1.2 per cent and 0.2 per cent, respectively. The Dow is slated for a 0.3 per cent advance.

Meanwhile, Disney gained 4.9 per cent and was the best performer in the Dow after announcing an upcoming price hike for ad-free Disney+ subscriptions. Late Wednesday, the media giant also reported fiscal third-quarter earnings per share that beat expectations.

More than 90 per cent of S&P 500 companies have reported earnings for the quarter as of Thursday morning. Of those, about four-fifths have beat Wall Street expectations, according to FactSet.

In further company news, Tapestry, which owns Coach, Kate Spade, and Stuart Weitzman, is set to acquire Capri Holdings , which owns Michael Kors, Versace, and Jimmy Choo, in a whopping $8.5 billion deal. Capri Holdings shares rose on news of the deal.

In commodity news,TD Securities suggests that despite recent resilient price action in copper markets, the deterioration of base metal demand trends and the significant wave of mine supply growth are likely to ease supply risks and impact copper prices, although they caution that prices might not yet reflect these changes in demand and supply dynamics.

Overall, when assessing US sectors, Communication Services was the best performer, whilst Utilities was the worst.

Futures

The SPI futures are pointing to a 0.3 per cent fall.

Currency

One Australian dollar at 7:20 AM was buying 65.17 US cents.

Commodities

Gold lost 0.09 per cent. Silver added 0.40 per cent. Copper fell 0.49 per cent. Oil dropped 1.87 per cent.

Figures around the globe

European markets closed higher. London’s FTSE added 0.41 per cent, Frankfurt gained 0.91 per cent, and Paris closed 1.52 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei added 0.84 per cent, Hong Kong’s Hang Seng added 0.01 per cent while China’s Shanghai Composite closed 0.31 per cent higher.

The Australian sharemarket closed 0.26 per cent higher at 7357.

Ex-dividends

Australian Foundation Investment Co (ASX:AFI) is paying 14 cents fully franked
BKI Investment (ASX:BKI) is paying 4 cents fully franked
JCurve Solutions (ASX:JCS) is paying 0.175 cents fully franked
Janus Henderson (ASX:JHG) is paying 59.2615 cents unfranked
SSR Mining Inc (ASX:SSR) is paying 7.9775 cents unfranked

Dividends payable

Newmark Property REIT (ASX:NPR)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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