Markets are sinking on the heels of the latest Producer Price Index report, which showed inflation was in line with expectations.
The important number is year over year, and year over year excluding more volatile food and energy prices.
Year over year, the number came in at 2.2% versus expectations of 2.2%. And YoY excluding food and energy, we got a reading of 2.4% versus expectations of 2.4%.
This tells us that the Federal Reserve isn’t making progress in the fight against inflation, which is exactly the level as it was next year.
This means we’re less likely to get an interest rate cut any time soon. Other than that, the report isn’t terrible… But it’s not good, either.
Federal Reserve Chair Jerome Powell speaks at 10 a.m. ET, and it will be interesting to see what he has to say in defense of making no headway in the inflation fight.
The next big report is the Consumer Price Index, which we’ll get at 8:30 a.m. ET Wednesday, and this is likely to set the tone for the rest of the week.
We also had Alibaba (BABA), which is down nearly 5%, and Home Depot (HD) earnings, which is now up a little premarket.
Volatility, meanwhile, is likely to rise…
I’ll cover all that, my daily hitlist of longs and shorts and more in this morning’s “Premarket Must Watch” video!
Roger Scott
Roger Scott Trading
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P.S. See the Secret Wall Street Moves on 2 Defense Stocks
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