This stock jumped 80%?

The August inflation report is out and markets are watching closely. Annual CPI rose to 2.9%, the highest since January. That is after two months at 2.7%. On a monthly basis CPI rose 0.4%, hotter than July’s 0.2% and above the 0.3% forecast.

Core inflation stayed firm at 3.1%, still sitting at this year’s peak. Month on month it rose 0.3%, exactly in line with expectations but showing no real cooling.

The big picture is inflation is sticky. Food and autos are running hot again, energy turned up, and shelter remains heavy. Not the kind of report the Fed wants to see. Markets are nervous because rate cut expectations are sky high but the Fed may not move as quickly. September and Q4 could be volatile.

Now let’s talk stocks.

Oracle jumped nearly 36% after earnings, posting one of its best runs ever. The excitement is around their AI partnerships and growing cloud business. But here is the key question: is this sustainable or is the market getting carried away. Options traders are piling in which adds fuel to the fire, but long term fundamentals matter more than hype.

Opendoor made headlines too, rallying almost 80% after announcing a new CEO. That is a monster move for a company that has been written off by many. Leadership changes can reset narratives, but the business model still has to deliver in a challenging real estate environment.

Bottom line, inflation is back on the rise, Oracle is flying on AI hype, and Opendoor is trying to stage a comeback. These are the moments where positioning matters more than prediction.

Happy Hunting!

Pete
Invest with Pete

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The information provided in this newsletter is for informational purposes only and does not constitute financial advice. Readers should seek their own independent financial advice before making any investment decisions. Please note that while Pete is a portfolio manager, the opinions expressed in this newsletter are his own and do not represent the views of any organization. Always perform your own research and due diligence before investing.