An obscure report next week could prove a boon for stocks

Shortly before the opening bell on Tuesday, the Federal Reserve is set to publish its monthly industrial production report, which is expected to bounce back from a sharp decline.

Some are watching the index closely after hurricane devastation impacted the prior report.

"This is a very important gauge for how well the overall economy is doing," Eddy Elfenbein, portfolio manager at AdvisorShares, said Friday on CNBC's "Trading Nation."

It is expected the index will post a month-over-month increase of 0.3 percent, according to FactSet data. This follows last month's decline of 0.9 percent, which reflected manufacturing, mining and electric activity in August. In the last industrial production report, the Fed attributed about 0.75 percentage point of the decline to hurricane effects.

Should the report turn up positive, stocks in the industrial space would benefit, Elfenbein said.

"This means areas like chemicals, mining, manufacturing, anything that's industrial that involves pulling things out of the earth and putting them together," he said, adding that the results are likely to impact upcoming inflation indicators, too.

"The Federal Reserve seems to think that inflation will become more of a problem into next year; we haven't seen the evidence just yet," he said.

Relatively tepid inflation growth this year has proved somewhat of a puzzle to economists and the Fed alike, and has been seen as a factor that may influence the central bank's decision to hike interest rates.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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