Stock futures are flat as Wall Street awaits key inflation report

CNBC Pro: Want to invest in real estate? These REITs are among analysts’ favorites

Real estate investment trusts — or REITs — are coming back to the spotlight after a volatile year for many asset classes.

Analysts from Morgan Stanley and Citi highlight REITs from two sectors that they say could outperform the wider market, and remain resilient in a recession.

CNBC Pro subscribers can read more here.

— Wheat Tan

Fed actions this month could be ‘nonevent’ for asset prices, Ameriprise says

The upcoming September Federal Reserve meeting, where the central bank is expected to raise interest rates, is likely already priced into the market, according to Ameriprise chief market strategist Anthony Saglimbene.

“In our view, central bank actions this month are likely a nonevent for asset prices,” he wrote in a Monday note. “However, incoming economic data over the coming weeks and months and its influence on policy actions next year could play a much more significant role in shaping stock direction over the intermediate term.”

Markets now expect the Fed to hike rates by 0.75 percentage point, meaning that assets may not move much if that is the central bank’s decision. A consumer price index report Tuesday that’s in-line with expectations may also not move the needle.”

“Unless inflation figures last month changed substantially more than expected, including Wednesday’s update on the August Producer Price Index (PPI), we believe a 75 basis point hike from the Fed is essentially locked in at this point,” he said.

—Carmen Reinicke

Relief rally is likely bear market bounce, Wells Fargo says

The recent relief rally in stocks is likely another bear market bounce and investors should position for more choppiness ahead, according to Wells Fargo.

“Year-do-date, the outperformance of defensive, high shareholder payout, high-quality and low-valuation stocks reminds investors of the hallmark of a bear market,” global portfolio and investment strategist Chao Ma wrote in a Monday note.

Such recoveries happen in nearly every bear market and many are quickly reversed, leaving investors with regrets, they added.

“Although it is difficult to predict the bottom of a bear market, in the past, market bottoms were typically preconditioned by over-pessimistic market sentiment and a sign of definite improvement in the underlying economic or market issue,” Ma said. “We believe we are not there yet in either regard.”

In the meantime, Ma recommends investors look for defensive stocks with low volatility, high dividends and share repurchase yields. He also says investors should go for high quality names with profitability and leading market share and affordable market price.

—Carmen Reinicke

US stock futures rise ahead of Tuesday CPI report

US stock futures were higher Monday night as Wall Street looks ahead to the August consumer price index report set to be released Tuesday morning. The report will give investors an update on the inflation situation in the US and is one of the last pieces of data the Federal Reserve will see ahead of its September meeting.

Dow Jones Industrial Average futures gained 55 points, or 0.17%. S&P 500 and Nasdaq 100 futures climbed 0.18% and 0.21%, respectively.

—Carmen Reinicke

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