Morning Minutes

Stronger Producer Prices Knock Down Stocks




US index futures had been building on yesterday’s gains but have turned downward in the last few minutes following the release of US producer price inflation numbers that did not ease as much as hoped, keeping hawkish pressure on the Fed heading into next week’s meeting.

Headline US producer prices declined as expected (7.4% vs previous 8.1%). Core PPI, excluding food and energy. Decreased from last month but not as much as investors had hoped (6.2% vs street 6.0% and previous 6.7%). Inflation numbers out of China overnight showed Consumer Prices increasing more than expected (1.6% vs street 1.0%), and producer prices decreasing less than expected (-1.3% vs street -1.5%).

Currently, US index futures are down 0.3%-0.4%. Over in Europe, the Dax is flat, and the FTSE is down 0.4%.

Overnight earnings reports from retailers were mixed with Lululemon beating the street slightly ($1.99 vs street $1.97), and Costco Wholesale missing expectations slightly ($3.07 vs street $3.12). Currencies are quiet except for a 0.4% gain by Gold. In commodity action, Copper is down 0.4%, but energy contracts are picking up with WTI Crude Oil climbing 1.6% and Natural Gas rallying 3.0%.  

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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