Stocks were already down ahead of the Producer Price Index (PPI) inflation report, which came in even worse than expectations, sending stocks downward.
PPI isn’t quite as important as the Consumer Price Index, which gave the market a boost Wednesday after it was in line with expectations.
But it’s still important because if producers pay more, consumers pay more because they of course pass higher costs down.
And producers are clearly paying more…
Year over year, PPI came in at 3.0% vs. expectations of 2.6%. Excluding more volatile food and energy prices, the number came in at 3.4% vs. expectations of 3.2%.
Last year at this time, the numbers were 2.2% and 3.1%, respectively.
Jobless claims also came in and while those are getting worse, it’s not really worth talking about compared to the PPI.
Meanwhile, the market’s priced in a 95% chance that we’ll get another 0.25% interest rate cut next week, so the Fed is in a serious pickle.
If they don’t lower rates, then Fed Chair Jerome Powell will take a hit for lowering rates a few months ago when he shouldn’t have. But he’ll likely play it off like they’re making progress, and lower rates again.
But the fact is, they never should have lowered rates and should have waited until after the election to see more data.
TLT, meanwhile, is one of the few things actually moving higher…
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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