Stocks Look Overbought Ahead of Key CPI and PPI Reports

Stocks appear somewhat overbought in the near term, and markets may “back and fill” ahead of major inflation releases, according to the commentary. The week’s key data are the July CPI report on Wednesday and the July PPI report on Thursday. Economists forecast CPI up 0.1% and PPI up 0.2%. If inflation prints lower, Treasury yields could drift lower and reduce pressure on the Fed to raise rates. Oil is moving higher despite an “almost” deal between Oman and Iran, with the Strait of Hormuz still largely closed. The U.S. is described as less affected by regional bottlenecks.