“I try to do the right thing at the right time. They may just be little things, but usually they make the difference between winning and losing.” ~ Kareem Abdul-Jabbar

Good evening:

It was a choppy week marked by continued challenges for investors and an abundance of economic data, including CPI and PPI numbers. Headline CPI for August came in hot, above both Street expectations and Fundstrat’s. Yet, as Head of Research Tom Lee noted, “there was a relatively positive follow through” to the news, reinforcing his case that September’s weakness was front-loaded. “We expect the overall tone of markets to improve as we head into the end of the month,” he said. 

There might also be a fundamental reason for the market’s mild reaction to the higher-than-expected core CPI. Much of the increase was driven by an unexpected surge in the airline-fares metric used in its calculation. Ken Xuan, our Head of Data Science, found that this was due to the methodology used to strip out seasonality factors in airfares (they peak every year in the summer season due to high demand) rather than any inflationary pressure. In our weekly research huddle, Xuan argued that this is something the Fed’s decision makers will be aware of and consider going into next week – that...

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