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October PPI Posts Biggest Drop in More Than 3 Years
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It’s the biggest morning of the week in terms of economic data — at least in range, if not impact — with October PPI results joining U.S. Retail Sales, also for October, and Empire State manufacturing for November, in addition to more retail earnings for fiscal Q3. The Dow has gained +72 points as of this hour, the S&P 500 is up +14, the Nasdaq +90 (leading the way yet again) and the small-cap Russell 2000 +4 points.
October Producer Price Index (PPI) numbers fell notably to -0.5% from a downwardly revised +0.4% the previous month, and well off the +0.1% analysts were expecting. This is the lowest monthly print since April 2020’s -1.2%, which was the heart of the Covid-based meltdown. Core (ex-food & energy costs) month over month dropped to 0.0% from +0.2% anticipated, and ex-food, energy and transportation came in at +0.1%. So we see some of these more volatile metrics had a lot to do with the low headline figure.
Year over year, wholesale PPI prices are down to +1.3% — not the lowest we’ve seen in this cycle: that would be the +0.3% and +1.2% we saw in June and July of this year, respectively, but reversing the upward trajectory of the past couple months of PPI year over year. Core year over year reached +2.4%, 30 basis points (bps) below expectations. You’d have to go back to January of 2021 for a lower read on this metric. Ex-food, energy and transportation was the only print going the other direction: +2.9% from +2.8% analysts were looking for.
Retail Sales for October came in at -0.1%, slightly hotter than the -0.2% expected, but this follows an upwardly revised +0.9% the previous month. Ex-autos came in +0.1%, slightly raised from the 0.0% expected but well lower than the upwardly revised +0.8% for September. Ex-autos & gas was also +0.1%. Control was in-line with expectations at +0.2%, well off the upwardly revised +0.7% previously.
Empire State manufacturing data showed a big upward surprise for November: +9.1%, the best print since April’s 10.8 and well above the -3.0 anticipated and October’s -4.6. This is the fifth positive month so far in 2023 for manufacturing productivity in New York State. We look for higher numbers in the coming months to present something of a bounce-back for the region after a very tough year.
Target (TGT - Free Report) shares are up +14% in today’s pre-market by beating and raising in its Q3 earnings report ahead of the opening bell today: earnings of $2.10 per share easily surpassed the $1.48 expected — and a swing to the positive from the year-ago $1.54 per share, on $25.4 billion in revenues, which outpaced the $25.24 billion expected. Next quarter guidance for earnings per share is currently a range of $1.90-2.60, now putting the previous Zacks consensus estimate of $2.16 on the bottom half of expectations. Look for Target’s Zacks Rank #4 (Sell) to improve in the coming days.
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October PPI Posts Biggest Drop in More Than 3 Years
It’s the biggest morning of the week in terms of economic data — at least in range, if not impact — with October PPI results joining U.S. Retail Sales, also for October, and Empire State manufacturing for November, in addition to more retail earnings for fiscal Q3. The Dow has gained +72 points as of this hour, the S&P 500 is up +14, the Nasdaq +90 (leading the way yet again) and the small-cap Russell 2000 +4 points.
October Producer Price Index (PPI) numbers fell notably to -0.5% from a downwardly revised +0.4% the previous month, and well off the +0.1% analysts were expecting. This is the lowest monthly print since April 2020’s -1.2%, which was the heart of the Covid-based meltdown. Core (ex-food & energy costs) month over month dropped to 0.0% from +0.2% anticipated, and ex-food, energy and transportation came in at +0.1%. So we see some of these more volatile metrics had a lot to do with the low headline figure.
Year over year, wholesale PPI prices are down to +1.3% — not the lowest we’ve seen in this cycle: that would be the +0.3% and +1.2% we saw in June and July of this year, respectively, but reversing the upward trajectory of the past couple months of PPI year over year. Core year over year reached +2.4%, 30 basis points (bps) below expectations. You’d have to go back to January of 2021 for a lower read on this metric. Ex-food, energy and transportation was the only print going the other direction: +2.9% from +2.8% analysts were looking for.
Retail Sales for October came in at -0.1%, slightly hotter than the -0.2% expected, but this follows an upwardly revised +0.9% the previous month. Ex-autos came in +0.1%, slightly raised from the 0.0% expected but well lower than the upwardly revised +0.8% for September. Ex-autos & gas was also +0.1%. Control was in-line with expectations at +0.2%, well off the upwardly revised +0.7% previously.
Empire State manufacturing data showed a big upward surprise for November: +9.1%, the best print since April’s 10.8 and well above the -3.0 anticipated and October’s -4.6. This is the fifth positive month so far in 2023 for manufacturing productivity in New York State. We look for higher numbers in the coming months to present something of a bounce-back for the region after a very tough year.
Target (TGT - Free Report) shares are up +14% in today’s pre-market by beating and raising in its Q3 earnings report ahead of the opening bell today: earnings of $2.10 per share easily surpassed the $1.48 expected — and a swing to the positive from the year-ago $1.54 per share, on $25.4 billion in revenues, which outpaced the $25.24 billion expected. Next quarter guidance for earnings per share is currently a range of $1.90-2.60, now putting the previous Zacks consensus estimate of $2.16 on the bottom half of expectations. Look for Target’s Zacks Rank #4 (Sell) to improve in the coming days.