📉 Is THIS The Cue To Lower Rates?

Good morning. US stock futures rose in Thursday morning trading as investors gained confidence in signs of easing inflation.

📉 US inflation touches lowest level in 3 years

📝 Our report: Looks like inflation decided to take a bit of a breather! The consumer price index (CPI) ticked up by 0.2% last month, bringing the annual inflation rate to 2.9%—the lowest it’s been since March 2021. The CPI rose as expected in July, driven by higher housing-related costs, according to the Labor Department’s latest report.

 🔑 Key points:

• Inflation readings have been gradually drifting back to the US central bank’s 2% target.

• Federal Reserve officials have indicated a willingness to ease, though they’ve been careful not to commit to a specific timetable nor to speculate about the pace at which cuts might occur.

• As inflation has eased, percolating concerns about a slowing labor market seemed to have raised the likelihood that the Fed will start cutting for the first time since the early days of the Covid crisis.

💡 So what: With U.S. inflation rates reaching their lowest level in three years, the Federal Reserve is likely to proceed with cautious optimism. This decline suggests that the Fed's previous interest rate hikes may be working, but rather than rushing to adjust rates further, the central bank is expected to adopt a wait-and-see approach. They will likely hold current rates steady while closely monitoring the economy to ensure inflation remains in check without stifling growth. If inflation continues to stabilize, the Fed might delay further tightening, but any signs of resurgence could prompt a return to more aggressive measures.

Thursday - U.S. Retail Sales

Friday - Consumer Sentiment

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🍪 Sweet snack takeover

WHAT: It’s a sweet deal that’s sure to shake up the snack aisle! Mars is set to snap up Kellanova for $35.9 billion in cash, merging some of the biggest names in U.S. candy and snacks. The addition of Kellanova, which separated from its parent company in 2023, will bring massive brands like Pringles and Cheez-Its to Mars’ snacking unit.

WHY: The move comes after Kellogg separated its business last year, with its cereal segment trading under WK Kellogg Co, and the remaining snacking and plant-based brands under Kellanova. Net sales in 2023 for Kellanova topped $13 billion.

🛸 UK to test use of drone deliveries

WHAT: Britain's aviation regulator has given the green light to six projects, including one by Amazon, to put drones to work in deliveries, infrastructure inspections, and emergency services. The UK's Civil Aviation Authority (CAA) had said earlier this year that it wanted to permit more drone flying for such uses.

WHY: Currently drone users in Britain are only permitted to fly beyond the visual line of sight as part of trials with strict restrictions. As part of the trials announced by the CAA, selected projects would be able to fly their drones at distances beyond the flyer's ability to see them, using advanced technologies for navigation, control and to detect other aircraft.

📱 SEC fines firms millions over electronic communication failures

WHAT: Twenty-six financial firms have collectively agreed to cough up around $393 million in fines after the US Securities and Exchange Commission (SEC) found they weren't keeping tabs on their employees' electronic chatter—fallout from the regulator’s ongoing "WhatsApp investigations." Some of the firms include Bank of New York Mellon, LPL Financial Holdings and Ameriprise Financial.

WHY: In its announcement, the SEC said the firms agreeing to pay penalties admitted to breaking record-keeping rules. The agency said its probes “uncovered pervasive and longstanding use of unapproved communication methods.”

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