Business Optimism Grows; Consumer Inflation Does Not

Early this morning, the National Federation of Independent Businesses began the week with an announcement that its Small Business Optimism Index took a leap in September to 104 from 100.2 while analysts were only expecting a slight improvement to 100.9. Following that, the BLS reported that the headline Consumer Price Index rose by the anticipated 0.2% last month while the year-over-year pace remained unchanged at 1.4%. Similarly, core CPI, without food and energy, also notched a monthly rise of 0.2% with its year-over-year rate also remaining unchanged at 1.7%. Contained in the same report, investors learned that inflation-adjusted Real Averagely Weekly Earnings rose by 4.1% last month in a slight rise from the previous month’s slightly revised 3.8% pace. Real Average Hourly Earnings rose by 3.3% in September and that was slightly higher than August’s revised 3.2% growth.

Treasury prices are up somewhat this morning with the Ten-Year yielding 74 basis points and the Long Bond at 1.53%. The Two-Year is still anchoring the short end at around 14 basis points. Gold is little changed at $1,923 while crude oil’s small rally has taken it to just over $40. Equity indices are likely to open in the red as hopes for stimulus fade and Johnson & Johnson announces a temporary pause in its clinical trials for its covid vaccine.