Stocks closed mixed yesterday with the S&P 500 and Nasdaq in the green, while the Dow, small-cap Russell 2000 and mid-cap S&P 400 were in the red.

All eyes will be on this morning's Consumer Price Index (CPI) retail inflation report. The headline number is expected to show a 0.2% m/m increase, the same as last month. On a y/y basis, it's expected to come in at 2.6%, down from last month's 2.9% and the previous month's 3.0%. The core rate (ex-food & energy) is expected to be up 0.2% m/m as well, in line with last month. The y/y rate is expected to come in at 3.2%, also in line with last month and below the previous month's 3.3%.

The overall changes in today's report are expected to be small to flat. But that would be enough to see progress on inflation continue or at least not regress. A bigger decrease in inflation would likely be cheered. Although, after last week's weaker-than-expected jobs report, some may read too much into it. But continued progress on inflation is what the market is hoping for.

In other news yesterday, the NFIB Small Business Optimism Index came in at 91.2 vs. last month's 93.7 and views for 93.6.

Michael Barr, Vice Chair for Supervision at the Fed said that they would be trimming the proposed capital requirements for the largest banks from 19% to 9% instead (roughly half what was previously expected). Mr. Barr said "there are benefits and costs to increasing capital requirements The changes we intend to make will bring these two important objectives into better balance."

China reported yesterday that their exports grew by a greater-than-expected 8.7% (in U.S. dollars) in August vs. estimates for 6.5%. Although, imports grew by a less-than-expected 0.5% vs. estimates for 2%. (In July exports grew by 7%, while imports increased by 7.2%.)

In addition to today's CPI report, we'll also get MBA Mortgage Applications, the Quarterly Services Survey, the EIA Petroleum Status Report, and the Treasury Buyback Announcement.

Tomorrow we'll get another look at inflation with the Producer Price Index (PPI) wholesale inflation report.

Between today's CPI and tomorrow's PPI, those will be the last pieces of inflation data the Fed will get before they meet next week on the 9/17-18.

The Fed has acknowledged that inflation risks have receded while labor risks have increased. And given the recent progress on inflation, it's hard to imagine a number that would preclude the Fed from lowering rates next week. But this week's inflation reports could help influence what happens afterwards in November and December.

For those following meme stock GameStop, they reported earnings after the close yesterday and posted a 200% positive EPS surprise, but an 11.30% negative sales surprise. That translated to a triple-digit quarterly EPS growth rate vs. this time last year, but a sales growth of -31.2%. They were off by 3.30% in the regular session before earnings, and down roughly 8% in after-hours following earnings.

The CPI inflation report comes out this morning at 8:30 AM ET.

Should be a busy day.

See you tomorrow,