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CNBC Daily Open: August’s CPI report isn’t as bad as it seems

Published

2 years ago

September 14, 2023

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A view of a gas station as gas prices are at the highest level from last year in Virginia, on August 16, 2023.

Celal Gunes | Anadolu Agency | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Biggest monthly jump this year
The U.S. consumer price index for August rose 3.7% from a year ago and a seasonally adjusted 0.6% for the month, mostly in line with the expected 3.6% and 0.6%, respectively. Though expected, it’s still the biggest month-on-month increase in prices this year. Energy prices, which soared on the month, were mostly to blame. Core inflation, which excludes food and energy prices, was up 4.3% on the year and 0.3% on the month.

Markets shrugged
U.S. markets were mixed Wednesday, with the Dow Jones Industrial Average the only major index to fall. The pan-European Stoxx 600 fell 0.32% as European dealmaking sentiment remains cautious, according to a new report from law firm CMS and Mergermarket. Meanwhile, the U.K.’s economy shrank 0.5% month on month in July, more than the 0.2% expected.

An Arm and a leg
Arm is pricing its initial public offering at $51 per share, the top of its expected price range. That values the company at over $54 billion, giving it a price-to-earnings multiple of about 104. By comparison, Apple’s multiple is around 30, Tesla’s is 77 and Nvidia’s is 110 for the previous 12 months. Softbank, Arm’s current towner, will control about 90% of the company’s outstanding shares.

Rebuilding Citi
Citigroup CEO Jane Fraser reorganized the firm, dividing it into five main business lines that report directly to her. Previously, the bank had only two main divisions. The corporate shuffling will include job cuts, though the number is yet to be decided. Shares of Citigroup have declined about 40% since Fraser assumed the top job in March 2021, and trades for the lowest valuation among U.S. big banks.

[PRO] Joining the Tesla party
On Monday, Morgan Stanley published a note asserting Tesla could rally 60%. But that’s nothing compared to the call made by Ron Baron, the billionaire investor who founded Baron Capital in 1982. Baron thinks Tesla could grow to as much as five times its current stock market capitalization — here’s what he has to say about the electric vehicle manufacturer and Elon Musk’s other companies.

The bottom line

At first glance, August’s CPI report seems bad news. The month-over-month jump in prices is the highest in a year. And even core inflation came in hotter than expected. But look more closely and you’ll find things aren’t as terrifying as they seem.

The headline number was pushed up by rising oil prices, which have been steadily increasing in recent weeks, as we’ve talked about. Gasoline prices soared 10.6% in August, the largest contributor to inflation last month, according to the U.S. Bureau of Labor Statistics.

But it’s likely gasoline prices will fall after a month or two, according to Andrew Hunter, deputy chief U.S. economist at Capital Economics. And gasoline prices have actually retreated 3.3% from a year ago, suggesting that they’re still on a downward trend in the long run.

Excluding volatile energy prices, monthly core inflation was up 0.3% against the expected 0.2%. Here, shelter costs were the main culprit for the hotter-than-expected increase. “Housing continues to contribute an outsized share to the inflation measures,” said Lisa Sturtevant, chief economist at Bright MLS.

But, Sturtevant added, “rent growth has slowed considerably and median rents nationally fell year-over-year in August.” That slowdown in prices will show up in future reports, meaning that August’s core CPI numbers is just “a little bump in the road,” as Kayla Bruun, senior economist at Morning Consult, put it.

“It doesn’t mean it’s turning around and going in the other direction,” Bruun said. “Overall, most of the pieces are headed in the right direction.” Indeed, the annual measure of core CPI still dropped from 4.7% in July to 4.3% in August.

Markets took the numbers in their stride. The Dow was the only major index to fall, losing 0.2% as shares of 3M and Caterpillar sank. The S&P 500 added 0.12% and the Nasdaq Composite rose 0.29%, helped by gains in Tesla and Amazon. And traders are still betting the Federal Reserve won’t raise rates next week, according to the CME FedWatch Tool.

Markets can act in irrational ways sometimes. But sometimes, the crowd psychology of markets manifests as collective wisdom.

— CNBC’s Jeff Cox and Greg Iacurci contributed to this report

Environment

I found this cheap Chinese e-cargo trike that hauls more than your car!

Published

6 hours ago

July 5, 2025

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I found this cheap Chinese e-cargo trike that hauls more than your car!

If you’ve ever wondered what happens when you combine a fruit cart, a cargo bike, and a Piaggio Ape all in one vehicle, now you’ve got your answer. I submit, for your approval, this week’s feature for the Awesomely Weird Alibaba Electric Vehicle of the Week column – and it’s a beautiful doozie.

Feast your eyes on this salad slinging, coleslaw cruising, tuber taxiing produce chariot!

I think this electric vegetable trike might finally scratch the itch long felt by many of my readers. It seems every time I cover an electric trike, even the really cool ones, I always get commenters poo-poo-ing it for having two wheels in the rear instead of two wheels in the front. Well, here you go, folks!

Designed with two front wheels for maximum stability, this trike keeps your cucumbers in check through every corner. Because trust me, you don’t want to hit a pothole and suddenly be juggling peaches like you’re in Cirque du Soleil: Farmers Market Edition.

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To avoid the extra cost of designing a linked steering system for a pair of front wheels, the engineers who brought this salad shuttle to life simply side-stepped that complexity altogether by steering the entire fixed front end. I’ve got articulating electric tractors that steer like this, and so if it works for a several-ton work machine, it should work for a couple hundred pounds of cargo bike.

Featuring a giant cargo bed up front with four cascading fruit baskets set up for roadside sales, this cargo bike is something of a blank slate. Sure, you could monetize grandma’s vegetable garden, or you could fill it with your own ideas and concoctions. Our exceedingly talented graphics wizard sees it as the perfect coffee and pastry e-bike for my new startup, The Handlebarista, and I’m not one to argue. Basically, the sky is the limit with a blank slate bike like this!

Sure, the quality doesn’t quite match something like a fancy Tern cargo bike. The rim brakes aren’t exactly confidence-inspiring, but at least there are three of them. And if they should all give out, or just not quite slow you down enough to avoid that quickly approaching brick wall, then at least you’ve got a couple hundred pounds of tomatoes as a tasty crumple zone.

The electrical system does seem a bit underpowered. With a 36V battery and a 250W motor, I don’t know if one-third of a horsepower is enough to haul a full load to the local farmer’s market. But I guess if the weight is a bit much for the little motor, you could always do some snacking along the way. On the other hand, all the pictures seem to show a non-electric version. So if this cart is presumably mobile on pedal power alone, then that extra motor assist, however small, is going to feel like a very welcome guest.

The $950 price is presumably for the electric version, since that’s what’s in the title of the listing, though I wouldn’t get too excited just yet. I’ve bought a LOT of stuff on Alibaba, including many electric vehicles, and the too-good-to-be-true price is always exactly that. In my experience, you can multiply the Alibaba price by 3-4x to get the actual landed price for things like these. Even so, $3,000-$4,000 wouldn’t be a terrible price, considering a lot of electric trikes stateside already cost that much and don’t even come with a quad-set of vegetable baskets on board!

I should also put my normal caveat in here about not actually buying one of these. Please, please don’t try to buy one of these awesome cargo e-trikes. This is a silly, tongue-in-cheek weekend column where I scour the ever-entertaining underbelly of China’s massive e-commerce site Alibaba in search of fun, quirky, and just plain awesomely weird electric vehicles. While I’ve successfully bought several fun things on the platform, I’ve also gotten scammed more than once, so this is not for the timid or the tight-budgeted among us.

That isn’t to say that some of my more stubborn readers haven’t followed in my footsteps before, ignoring my advice and setting out on their own wild journey. But please don’t be the one who risks it all and gets nothing in return. Don’t say I didn’t warn you; this is the warning.

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Environment

OPEC+ members agree to larger-than-expected oil production hike in August

Published

7 hours ago

July 5, 2025

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OPEC+ members agree to larger-than-expected oil production hike in August

The OPEC logo is displayed on a mobile phone screen in front of a computer screen displaying OPEC icons in Ankara, Turkey, on June 25, 2024.

Anadolu | Anadolu | Getty Images

Eight oil-producing nations of the OPEC+ alliance agreed on Saturday to increase their collective crude production by 548,000 barrels per day, as they continue to unwind a set of voluntary supply cuts.

This subset of the alliance — comprising heavyweight producers Russia and Saudi Arabia, alongside Algeria, Iraq, Kazakhstan, Kuwait, Oman and the United Arab Emirates — met digitally earlier in the day. They had been expected to increase their output by a smaller 411,000 barrels per day.

In a statement, the OPEC Secretariat attributed the countries’ decision to raise August daily output by 548,000 barrels to “a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories.”

The eight producers have been implementing two sets of voluntary production cuts outside of the broader OPEC+ coalition’s formal policy.

One, totaling 1.66 million barrels per day, stays in effect until the end of next year.

Under the second strategy, the countries reduced their production by an additional 2.2 million barrels per day until the end of the first quarter.

They initially set out to boost their production by 137,000 barrels per day every month until September 2026, but only sustained that pace in April. The group then tripled the hike to 411,000 barrels per day in each of May, June, and July — and is further accelerating the pace of their increases in August.

Oil prices were briefly boosted in recent weeks by the seasonal summer spike in demand and the 12-day war between Israel and Iran, which threatened both Tehran’s supplies and raised concerns over potential disruptions of supplies transported through the key Strait of Hormuz.

At the end of the Friday session, oil futures settled at $68.30 per barrel for the September-expiration Ice Brent contract and at $66.50 per barrel for front month-August Nymex U.S. West Texas Intermediate crude.

Environment

Podcast: Trump/GOP go after EV/solar, Tesla, Ford, GM EV sales, Electrek Formula Sun, and more

Published

21 hours ago

July 4, 2025

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Podcast: Trump/GOP go after EV/solar, Tesla, Ford, GM EV sales, Electrek Formula Sun, and more

In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss Trump’s Big Beautiful bill becoming law and going after EVs and solar, Tesla, Ford, and GM EV sales, Electrek Formula Sun, and more

Today’s episode is brought to you by Bosch Mobility Aftermarket—A global leader and trusted provider of automotive aftermarket parts. To celebrate Amazon Prime Day July 8th through 11th, Bosch Mobility is offering exclusive savings on must-have auto parts and tools. Learn more here.

The show is live every Friday at 4 p.m. ET on Electrek’s YouTube channel.

As a reminder, we’ll have an accompanying post, like this one, on the site with an embedded link to the live stream. Head to the YouTube channel to get your questions and comments in.

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After the show ends at around 5 p.m. ET, the video will be archived on YouTube and the audio on all your favorite podcast apps:

We now have a Patreon if you want to help us avoid more ads and invest more in our content. We have some awesome gifts for our Patreons and more coming.

Here are a few of the articles that we will discuss during the podcast: