Tuesday, November 9, 2021
We start a new day of trading moderately mixed on the major indexes: the Dow looks to start the day about 50 points in the red while the Nasdaq and S&P 500 are narrowly in the green. All three are coming off new record closing highs from Monday trading.
We also see a new Producer Price Index (PPI) report for October this morning, with +0.6% coming in exactly as expected and 20 basis points higher than September’s +0.5%. These figures all indicate what other metrics have been insisting for some time now: that inflation is real and lasting in our current economy.
The core PPI read — subtracting volatile food & energy costs — also came in spot-on with expectations to +0.4%, doubling the previous month’s +0.2% core PPI. Minus food, energy & trade also brings us to +0.4%, 10 basis points higher than consensus estimates.
We see the cumulative effect of monthly PPI growth by looking at the Year over year, final demand, which reached +8.6% last month — as expected, but also the highest read on record (going back to November 2010, when PPI metrics were recalibrated for better efficiency. Year over year core reached +6.8% — again, right in line with expectations, and also the hottest level in the past 11 years. Ex-food, energy & trade was +6.2% — still high, but not an all-time record.
The other shoe drops tomorrow when the October Consumer Price Index (CPI) report is released. Expectations are again for a +0.6% on the headline, up from the +0.4% reported the previous month. Core is expected to come in at +0.4%, again doubling September’s +0.2%. Will these two reads be aligned, or will one come in stronger than the other?
Tomorrow we also get new Initial and Continuing Jobless Claims numbers. Usually these wait until Thursday, but this week, Veterans Day will keep those doors closed. (Markets will be open for trading Thursday.) We are looking for new post-pandemic lows on both new and longer-term jobless claims, following last week’s excellent monthly jobs report from the U.S. Bureau of Labor Statistics (BLS).
Overall market gains are now in their sixth consecutive week; you’ll excuse the slightly exhausted appearance of early trading levels. But with nothing putting a damper on a strong economic outlook overall, we could just as easily see near-term fortunes take a turn to the positive at some point today.
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PPI +0.6%, In-Line & Record-High Year Over Year
Tuesday, November 9, 2021
We start a new day of trading moderately mixed on the major indexes: the Dow looks to start the day about 50 points in the red while the Nasdaq and S&P 500 are narrowly in the green. All three are coming off new record closing highs from Monday trading.
We also see a new Producer Price Index (PPI) report for October this morning, with +0.6% coming in exactly as expected and 20 basis points higher than September’s +0.5%. These figures all indicate what other metrics have been insisting for some time now: that inflation is real and lasting in our current economy.
The core PPI read — subtracting volatile food & energy costs — also came in spot-on with expectations to +0.4%, doubling the previous month’s +0.2% core PPI. Minus food, energy & trade also brings us to +0.4%, 10 basis points higher than consensus estimates.
We see the cumulative effect of monthly PPI growth by looking at the Year over year, final demand, which reached +8.6% last month — as expected, but also the highest read on record (going back to November 2010, when PPI metrics were recalibrated for better efficiency. Year over year core reached +6.8% — again, right in line with expectations, and also the hottest level in the past 11 years. Ex-food, energy & trade was +6.2% — still high, but not an all-time record.
The other shoe drops tomorrow when the October Consumer Price Index (CPI) report is released. Expectations are again for a +0.6% on the headline, up from the +0.4% reported the previous month. Core is expected to come in at +0.4%, again doubling September’s +0.2%. Will these two reads be aligned, or will one come in stronger than the other?
Tomorrow we also get new Initial and Continuing Jobless Claims numbers. Usually these wait until Thursday, but this week, Veterans Day will keep those doors closed. (Markets will be open for trading Thursday.) We are looking for new post-pandemic lows on both new and longer-term jobless claims, following last week’s excellent monthly jobs report from the U.S. Bureau of Labor Statistics (BLS).
Overall market gains are now in their sixth consecutive week; you’ll excuse the slightly exhausted appearance of early trading levels. But with nothing putting a damper on a strong economic outlook overall, we could just as easily see near-term fortunes take a turn to the positive at some point today.
Questions or comments about this article and/or its author? Click here>>