Apple Fails to Inspire Wonder or Lust for Stocks as CPI Awaits

The market reversed Monday’s gains as Apple’s (AAPL) new product announcements at its “Wonderlust” event failed to rally the buyers. It didn’t help matters that there are worries that Wednesday’s CPI report may show an uptick in inflation primarily due to rising energy prices.

It was a mixed day of action, with big-cap technology stocks more than offsetting strength in energy, financials, and pharmaceuticals. Breadth was around 3,500 gainers to 4800 decliners, but what was most notable was that new 12-month lows expanded to over 280 names.

Oracle (ORCL) was the biggest loser in the S&P 500, and Microsoft (MSFT) was the laggard in the DJIA.

Once again, speculative action in smaller stocks was very poor. There just isn’t much energy among traders, and we have just a small handful of names that are making moves of more than 10%. Even when something does jump, there is a very high risk of a quick fade. Two examples Tuesday were IonQ (IONQ) and Carvana (CVNA) .

The CPI report Wednesday is likely to be a market mover. The economic debate isn’t just about inflation, though. It is whether the Fed can kill inflation without also causing a substantial economic slowdown.

Economists and strategists have been increasingly optimistic that the economy will hold up well, but the bears are not buying it. I don’t know who is right, but the price action is going to tell which narrative takes hold.

We are still dealing with the poor seasonality of September, and the news flow is helping to make it self-fulfilling. We will see if CPI shakes things up on Wednesday.

Have a good evening. I’ll see you Wednesday.

(AAPL and MSFT are holdings in TheStreet’s Action Alerts PLUS portfolio. Want to be alerted before the portfolio buys or sells these stocks? Learn more now.)