Bed Bath & Beyond Stock News and Forecast: BBBY extends recovery ahead of US inflation

Update: Bed Bath and Beyond (BBBY) shares extended their recovery mode into the fourth straight trading day on Monday, as risk flows dominated at the start of the week. The extended correction in the US dollar and positive Ukraine news allowed markets to breathe a sigh of relief amid expectations of inflation easing further in America in August. Signs of inflation peaking could prompt the Fed to slow down on its tightening pace, which will bode well for the US stock market. However, markets have been on the rise even though a 75 bps September Fed rate hike is almost fully discounted. All eyes now remain on the US Consumer Price Index (CPI) data release on Tuesday for fresh cues on the Fed outlook and risk sentiment. BBBY's share price ended +2.69% at $9.17 on Monday.

Bed Bath and Beyond (BBBY) shares rose on Friday in a broad advance with all the major indices finishing strongly. This marked the first week in four that the stock market closed out a positive week. Investors will likely stay on the sidelines on Monday ahead of Tuesday's big CPI release.

Bed Bath & Beyond stock news

The company confirmed last week that Laura Crossen would take over the role of interim CFO of Bed Bath & Beyond following the passing of CFO Gustavbo Arnal. Crossen was already the Chief Accounting Officer so is well versed in the finances of the company, one would have to assume. Bed Bath & Beyond is in the throws of reorganizing its finances and restructuring as it seeks to navigate its way through a difficult period. BBBY stock has been under pressure due to the possibility of it selling shares and reorganizing its business model. The company said last week it would cut up to 20% of its jobs and reduce the number of brands it offered. 

Bed Bath & Beyond stock forecast

As a retail followed stock, this one is hugely volatile, making technical analysis and support and resistance levels somewhat meaningless. The moves are so violent, levels can be just obliterated if momentum builds. This is clearly a momentum play. I expect risk assets to perform well in the coming week and possibly longer. The premise of the bearish argument is that inflation will stick and that interest rates will remain higher for longer. This is something I believe will be the case.

However, it will take time for the data to show this. CPI is falling but will likely not fall back to 2% or even 3%. It will take a series of CPI data releases before the market realizes this. Tuesday's CPI print should show an improvement as oil prices are lower, shipping prices are lower, housing prices are lower and used car prices are lower. The comparisons versus last month are high meaning it is an easy slope lower from here. So the data should support the bulls who say inflation has peaked and the Fed will pivot in early 2023 and stop raising rates.

As a risk appetite barometer, Bitcoin closed on Friday at $21,300 and is currently trading at $22,100. Bitcoin and the Nasdaq are highly correlated, so expect more gains on Monday.

Bitcoin versus Nasdaq (orange line), daily

The author is short BBBY.