June CPI, Core CPI, Oil Inventories: 3 Things to Watch By

© Reuters.

By Liz Moyer

-- Stocks weakened ahead of Wednesday's print on June consumer prices, which is expected to show a 12-month gain of 8.8% amid the Federal Reserve's attempt to rein in a red-hot economy.

The consumer price index is hitting just as corporate earnings start to pour out for the second quarter, with expectations already wary for corporate outlooks.

The Fed is set to meet later this month and could raise interest rates by another three-quarter-point increment. Working in favor of consumer pocketbooks: energy prices continue to fall. Oil prices fell again on Tuesday, down more than 8% to under $100 a barrel, and eventually that could make its way to the gasoline pump, where prices have been retreating from over $5 a gallon earlier this summer.

But it's still a long battle ahead for the Biden administration, which is trying to convince the public it's doing what it can to control prices, but there are still forces it can't control, such as the ongoing energy crisis in Europe and a surge in Covid cases that has shut down several cities in China, which could affect manufacturing and supply chains down the road.

Here are three things that could affect markets tomorrow:

1. CPI for June

The consumer price index for June is expected to show year on year growth of 8.8%, and month on month growth of 1.1%, while economists have been looking for signs that prices had peaked and were cooling off.

2. Core CPI

Part of the problem is high energy and food prices, which aren't counted in the core CPI number. That core number is expected to rise 5.7% for the 12 months ending in June and 0.6% for the month.

3. Crude inventory

After a surprise build of 8 million barrels for the week before Fourth of July, crude inventory is expected to work its way back down. Analysts expect Wednesday's inventory reading to show a draw of 154,000 barrels for last week. That said, Tuesday night's reading from the API has a crude build of 4.7 million barrels. 

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