Wall Street Brunch: CPI Hits With Eyes On Oil Prices

Wall Street Breakfast5.74M FollowersSubscribe5ShareSaveCommentsSummaryWTI crude surged 36% last week, its largest weekly gain since inception, driven by Middle East conflict and supply disruptions.Prediction markets and analysts anticipate further oil price upside, with potential for $100–$150 per barrel if Persian Gulf exports halt.Rising oil is already expected to push U.S. headline CPI higher, with economists forecasting a 0.3% monthly gain and annual inflation edging to 2.5%.Oracle (ORCL) is recommended as a buy ahead of earnings, with focus on cloud revenue growth and a compelling valuation after recent underperformance. Hanizam/iStock via Getty Images Listen below or on the go via Apple Podcasts and Spotify Oil rally expected to continue amid disruptions and shutdown fears. (0:17) February core CPI seen up slightly. (1:28) Oracle earnings will test hyperscaler AI capex demand outlook. (2:11) The oil market will remain the key focus this week after WTI crude (CL1:COM) posted its biggest weekly rise since the contract launched in 1983 — up 36%. The rally is expected to continue Monday. WTI and Brent (CO1:COM) futures traded on the Hyperliquid blockchain topped $95 a barrel. On IG Group’s weekend market — which offers spread betting and CFDs — U.S. crude was trading just below $95. Kuwait has reduced production and refining as the conflict in the Middle East sends ripple effects across the region — including a near-total shutdown of the Strait of Hormuz. Meanwhile, Qatar’s energy minister warned that Persian Gulf exporters could shut down production within days, potentially driving oil to $150 a barrel. Prediction markets are also pricing in further upside. On Polymarket, traders see about a 25% chance oil tops $150, a 90% probability it moves above $100, and roughly a 7% chance it climbs past $200. Economists at Goldman Sachs say a sustained 10% rise in oil prices typically boosts headline CPI by 28 basis points. “If oil prices increase by $10 and remain elevated for three months, U.S. year-over-year headline CPI inflation would likely rise from 2.4% in January to 3% in May,” they said. We’ll get the latest consumer inflation numbers on Wednesday when the February CPI is released. Forecasts call for a 0.3% monthly gain in the headline, with the annual rate nudging up to 2.5%. Core CPI is expected to rise 0.2% on the month, with the yearly rate holding at 2.5%. Economists at Wells Fargo say energy is “set to reassert upward pressure” on overall prices, as oil and gasoline were already rising in anticipation of conflict in the Middle East. Softer food inflation should provide a partial offset, with grocery prices due for a modest decline in February. They add that the core rate will see “some payback” in services after outsized increases in travel and medical care in January — while core goods inflation likely firmed, reflecting higher used-vehicle prices and ongoing tariff pass-through. The earnings calendar continues to thin out, with just four S&P companies reporting this week. But Oracle (ORCL) will generate plenty of buzz on Tuesday as the canary in the coalmine for hyperscaler capex concerns. Consensus calls for EPS of $1.70 on $16.91B in revenue. Analysts expect investors to focus on Oracle Cloud Infrastructure revenue growth and outlook. SA analyst Amrita Roy says Oracle has likely found a bottom after significant underperformance tied to AI capex skepticism and free cash flow worries — especially given its backlog concentration toward OpenAI. She recommends buying ahead of earnings, calling the valuation compelling. Also on the earnings calendar: Hewlett Packard Enterprise (HPE) reports Monday. And on Thursday we hear from Adobe (ADBE), Dick's Sporting Goods (DKS), Lennar (LEN) and Ulta Beauty (ULTA). Also in the news this weekend, Novo Nordisk (NVO) plans to sell its obesity drugs on the telehealth platform run by Hims & Hers Health (HIMS) as part of a new partnership between the two firms, according to Bloomberg. A similar deal fell apart back in June after Hims (HIMS) refused to discontinue sales of low-cost compounded versions of Novo’s semaglutide therapy — even after the GLP-1 was no longer in shortage in the U.S. And for income investors, Alphabet (GOOG) (GOOGL) and FedEx (FDX) go ex-dividend on Monday. Alphabet pays out on March 16, and FedEx on April 1. Travelers (TRV) goes ex-dividend on Wednesday, with a March 19 payout date. And Coca-Cola (KO) goes ex-dividend on Friday, paying out on April 1 as well.This article was written byWall Street Breakfast5.74M FollowersSubscribeWall Street Breakfast, Seeking Alpha's flagship daily business newsletter, is a one-page summary that gives you a rapid overview of the day's key financial news. It is designed for easy readability on the site or by email (including mobile devices) and is published before 7:30 AM ET every market day.

Wall Street Breakfast's readership of more than 1 million subscribers includes many from the investment banking and fund management industries. Sign up here to receive the Wall Street Breakfast in your inbox every business day.