A soft landing for PPI eases pressure in the U.S. stock market—don’t mistake “no further rate hikes” for a high point of good news.
Just released: U.S. July PPI:
- Monthly: 0.0%, expected +0.2%
- Yearly: 4.7%, expected 4.9%, prior 5.5%
- Core PPI (excluding food and energy): +0.2%, expected +0.3%
The data is cooler than expected, but looking under the hood feels less comfortable:
- Goods: -0.7%, energy: -3.1%, gasoline: -5.7%, crude oil: -11.9%—the headlines are helped by energy
- Services: +0.2%, and the “super core” excluding food, energy, and trade: +0.4%—stickiness remains on the corporate side
Pre-market reaction is restrained:
- Dow futures about +0.3%
- S&P futures about +0.2%
- Nasdaq futures nearly flat; Cisco is down about 6%–7% in pre-market trading
- 10-year U.S. Treasuries around 4.66%; 2-year around 4.16%
- WTI crude around $81.3 (-2%)
- Gold gives back gains; Bitcoin near $63,400
The policy implications are clearer: after yesterday’s CPI beat/printed, today’s PPI softens another notch—bringing the probability of a September rate hike down from about 55% a week ago to around the low 30%s. Staying on hold is the main theme. But the Fed’s July decision was “9–3 on hold,” with three members still voting to hike. The market is also pushing the hiking window back to October or December, not flipping immediately to dovish.
In one sentence:
Inflation hasn’t re-accelerated, so risk assets can breathe; underlying services haven’t cooled, so don’t turn the bounce into a trend-belief.
Next, two things to watch: tonight’s after-hours earnings report from Applied Materials (AMAT), and tomorrow’s July retail sales. Macros are easing, but individual stocks are still all about margins and guidance.
Just released: U.S. July PPI:
- Monthly: 0.0%, expected +0.2%
- Yearly: 4.7%, expected 4.9%, prior 5.5%
- Core PPI (excluding food and energy): +0.2%, expected +0.3%
The data is cooler than expected, but looking under the hood feels less comfortable:
- Goods: -0.7%, energy: -3.1%, gasoline: -5.7%, crude oil: -11.9%—the headlines are helped by energy
- Services: +0.2%, and the “super core” excluding food, energy, and trade: +0.4%—stickiness remains on the corporate side
Pre-market reaction is restrained:
- Dow futures about +0.3%
- S&P futures about +0.2%
- Nasdaq futures nearly flat; Cisco is down about 6%–7% in pre-market trading
- 10-year U.S. Treasuries around 4.66%; 2-year around 4.16%
- WTI crude around $81.3 (-2%)
- Gold gives back gains; Bitcoin near $63,400
The policy implications are clearer: after yesterday’s CPI beat/printed, today’s PPI softens another notch—bringing the probability of a September rate hike down from about 55% a week ago to around the low 30%s. Staying on hold is the main theme. But the Fed’s July decision was “9–3 on hold,” with three members still voting to hike. The market is also pushing the hiking window back to October or December, not flipping immediately to dovish.
In one sentence:
Inflation hasn’t re-accelerated, so risk assets can breathe; underlying services haven’t cooled, so don’t turn the bounce into a trend-belief.
Next, two things to watch: tonight’s after-hours earnings report from Applied Materials (AMAT), and tomorrow’s July retail sales. Macros are easing, but individual stocks are still all about margins and guidance.