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Good morning investors!
Fun fact: Airline fares jumped 4.0% in July, the biggest monthly rebound in services that helped lift core CPI.
Today we cover:
Inflation rises
Earnings
COLA projections
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📊 Economy and News
Consumer Prices Rise 2.7% in July, Below Expectations Amid Tariff Concerns
Consumer prices in July rose 2.7% annually, slightly below the expected 2.8%, with a monthly increase of 0.2%.
Core CPI, excluding food and energy, climbed 0.3% monthly and 3.1% yearly, marking the highest annual rate since February.
Here’s what went up:
Shelter costs (+0.2%)
Household furnishings (+0.7%)
Tansportation services (+0.8%)
Medical care services (+0.8%)
Used cars/trucks (+0.5%)
Here’s what went down:
Energy prices fell 1.1%
Food, apparel, and canned fruits/vegetables remained largely flat.
Tariffs showed modest effects, sparking debate over whether their impact is temporary or persistent. Following the report, stock markets gained, Treasury yields were mixed, and traders increased bets for a Federal Reserve rate cut in September, with October cut odds rising to ~67%. Inflation-adjusted hourly earnings edged up 0.1% monthly and 1.2% annually.
Also, The White House criticized Goldman Sachs’ analysis that consumers bear a growing share of tariff costs, underscoring policy uncertainty heading into fall. The spat highlights how tariff dynamics feed into inflation and margins, a key variable for the Fed’s path. Investors should expect more headline risk as tariff timelines evolve.
Moreover, concerns are mounting over the quality of the government’s inflation and employment reports following budget and staffing cuts that have resulted in the suspension of data collection for portions of the CPI basket in some areas across the country.
Global hits:
Singapore revises 2025 GDP forecast upward after strong Q2 growth.
Cash held by US companies halved since 2021 amid high interest rates.
Canada building permits fall 9% in June as Ontario leads decline.
Brazilian inflation falls to 5.2% in July. Elsewhere, India’s retail inflation slows to 8-year low of 1.55% in July.
Good to know: Trump threatens Fed chair Powell with ‘major lawsuit,’ demands interest rate cut. Elsewhere, China warns companies against using Nvidia and AMD chips.
Some people now expect a rate cut next month, do you?
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📈 Stocks
S&P 500 6,445.76 (+1.13%)
DJIA 44,458.61 (+1.10%)
NASDAQ 21,681.90 (+1.39%)
BRENT CRUDE 66.12 (-0.77%)
* Prices as of Aug 13th, 12:20 AM UTC
More earnings
Cava’s quarterly revenue missed estimates due to weaker-than-expected same-store sales growth sending the stock down -20%. The Mediterranean restaurant chain lowered its full-year forecast for same-store sales. Cava also announced an investment in Hyphen, a restaurant automation startup.
CoreWeave reported better-than-expected revenue with help from OpenAI, which invested in the artificial intelligence infrastructure provider. The company acquired model monitoring startup Weights and Biases in the quarter. Still, shares slid 10% in extended trading. It now sees $5.15 billion to $5.35 billion in revenue for all of 2025, suggesting a 174% growth rate.
Circle Internet Group, the issuer of the world’s second-largest stablecoin, posted a quarter loss after one-time charges related to the crypto company’s June initial public offering offset revenue gains from a year earlier. The stock tumbled more than 5% in extended trading Tuesday after it said it would offer 10 million Class A shares to the public. Two million of the shares will be offered by the company, and 8 million shares will be sold by existing shareholders.
Controversial: FDA may pull authorization of Pfizer’s Covid vaccine for children under 5.
Elon Musk on Monday threatened Apple with legal action over alleged antitrust violations.
Spirit Airlines has issued a going-concern warning in its quarterly filing, months after emerging from bankruptcy,
Exciting: Perplexity offers to buy Google’s Chrome browser for $34.5 billion. Google declined to comment on the story; however, this follows a U.S. court ruling last year that Alphabet illegally monopolized online search, suggesting a Chrome divestiture. A federal judge is set to rule on remedies this month. Interestingly, Perplexity might not be able to pull it off as the company does’t seem to have enough cash.
💵 Personal Finance
New estimates suggest a 2.7% Social Security cost-of-living adjustment (COLA) for 2026, slightly higher than the 2.5% increase in 2025.
The projection, based on July inflation data, comes from experts like Mary Johnson and the Senior Citizens League.
The final COLA will depend on two more months of inflation data (August and September), calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
Historically, COLAs have averaged 2.6% over the past 20 years. Tariffs may influence future inflation, potentially affecting the 2026 COLA. The official announcement is expected in October.
💰 Be a Better Investor
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👩🏽⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.
Social Security COLA Projected at 2.7% for 2026