Remy Blaire: And with midday trading underway, let’s go out to Chicago. FINTECH.TV correspondent Mark Payton joins us live from the Cboe trading floor. Hey, Mark. So here we are in midday trade. What activity are you following over at Cboe?
Mark Payton: Hey, Remy, it’s been an interesting morning. We saw some early strength from the big banks following their earnings reports, but those gains have faded a bit, and the broader market has struggled to find direction. The Dow gave back much of its early gain, while the S&P 500 and Nasdaq have been slightly lower.
Goldman Sachs reported a stronger quarter, with stock trading revenue jumping 72% compared with a year ago. But we are still seeing pressure on semiconductor stocks, especially memory chip companies, as competition from China continues to grow.
And here at Cboe, we’re keeping a close eye on the VIX, especially with tomorrow’s inflation report coming up. Today it’s been around the 15.3 area. Now, the bond market is also back open after yesterday’s holiday, with the 10-year Treasury yield around 5.2%.
So despite some positive earnings reports, we’re not seeing a broad rally, and I think that’s the story today. Investors are weighing strong bank earnings against concerns about technology, inflation, and interest rates. And tomorrow’s inflation report could give us a much clearer picture of where things go next, Remy.
Remy Blaire: Yeah. And Mark, earnings season is just getting underway. Tomorrow morning, we get a handful of earnings that all of us are awaiting, including Morgan Stanley as well as Bank of America. But as you mentioned, that inflation report, CPI, coming out at 8:30 a.m. Eastern. So what are prediction market traders expecting to see when it comes to those September consumer prices?
Mark Payton: Yeah, the data is showing traders are expecting inflation to pick up again in September. On Polymarket, there’s about a 49% chance that inflation comes in at 0.6% for the month, and another 35% chance it’s 0.5%. And if you look at the graphic, forecasts are calling for overall inflation to rise 0.6% for the month, compared with just 0.2% for core inflation, which excludes food and energy.
And that’s a very important difference, because it suggests higher energy prices could be pushing the overall inflation number up. We’re also seeing expectations for producer prices to rise, which could mean higher costs for businesses. And remember, we got fresh employment data from ADP this morning showing hiring slowed a little.
So the Fed could be facing a tricky situation: slower hiring, but inflation that’s still picking up. And that’s why tomorrow’s inflation report is so important. It could have a big impact on interest rates and where markets go next, Remy.
Remy Blaire: Well, indeed, Mark, we are still looking at elevated oil prices, so we are anticipating tomorrow’s inflation figures. And you will be joining us tomorrow from Cboe as well. So thank you so much for today’s insights.
Mark Payton: Thank you.
