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Dow Breaks 5-Day Losing Streak as Investors Come to Terms

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The Dow managed to snap a five-day losing streak on an up-session for the markets across the board. This morning’s CPI Inflation Rate resumed its sizable drawdowns on a year-over-year basis by 40 basis points (bps) to +6.0% — down more than 300 bps from September’s 40-year highs. The Dow climbed +321 points on the day, +1.01%, while the Nasdaq grew +240 to +2.15%. The S&P 500 and the Russell 2000 split the difference: +1.66% and +1.89%, respectively.

Forecasts of a more dovish Fed during next week’s monetary policy meeting — either raising interest rates 25 bps or not raising at all — combine with news that bank depositors at the three financial institutions that went under in the past week contribute to the positive sentiment. The CPI figures definitely helped, resuming their bigger downward steps from what may have looked like resistance the previous two months.

Tomorrow we get the sister report to CPI: the Producer Price Index (PPI) for February, still expected higher month over month but by less than half the +0.7% PPI reported for January. Year over year, expectations are for +6.0% — just as we saw in CPI this morning — and nearly half what we saw in March last year, when it ballooned up to a 40-year-high +11.7%. Core PPI year over year is expected to come down to +4.5% for last month.

Retail Sales, also for February, will also be released before the bell Wednesday morning. Expectations here are for a big swing lower: -0.4% from the January print of +3.0%. Ex-autos are anticipated flat, following +2.3% the previous month. To cap things off tomorrow, we’ll also receive a new Empire State survey for March, and Business Inventories and the Homebuilders survey. Lots of grist for the mill.

Miami-based homebuilder Lennar LEN reported fiscal Q1 earnings after Tuesday’s close, with big beats on both top and bottom lines: earnings of $2.06 per share, outpacing the Zacks consensus by a Kennedy silver half-dollar on $6.49 billion in sales, surpassing the $6.00 billion analysts were looking for. Deliveries were up +9% while New Orders in a tough home-buying environment were -10%, in an overall challenging quarter for homebuilders. For more on LEN’s earnings, click here.

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