July's Producer Price Index (PPI) came in weaker than economists' expectations, revealing a 0.1% month-over-month and 2.2% year-over-year. HSBC chief multi-asset strategist Max Kettner joins Catalysts to discuss his market outlook following this data release.

Kettner views the soft print as "good news" for inflation, noting that it demonstrates "growth and inflation are actually continuing to head in the right direction." While investors hope for a rate cut, concerns about achieving a soft landing persist. Kettner finds this uncertainty "quite helpful," describing it as bullish for markets that participants disagree on inflation and other tail risks. He explains, "what it does, it really keeps sentiment and positioning in check."

However, Kettner cautions that a potential area of concern could be a broad-based weakening in the labor market that cannot be easily "explained away."

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This post was written by Angel Smith