Stocks End Mixed, PPI Inflation Report Due This Morning

Market Moves You Need to See Stocks End Mixed, PPI Inflation Report Due This Morning [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks End Mixed, PPI Inflation Report Due This Morning [Stocks End Mixed, PPI Inflation Report Due This Morning]Image: Bigstock Stocks closed mixed yesterday with the S&P and Nasdaq finishing modestly higher, while the Dow and small-cap Russell 2000 ended lower. Yesterday's Consumer Price Index (CPI) inflation report came in near to a bit above expectations. The headline number was up 0.6% m/m, which was up from last month's 0.2%, but in line with the consensus for 0.6%. On a y/y basis it was up 3.7%, which was above last month's 3.2% and views for 3.6%. The core rate (ex-food & energy) was up 0.3% m/m vs. last month's 0.2% pace and estimates for the same. On a y/y basis it came in at 4.3%, which was down from last month's 4.7% and in line with estimates. Rising energy prices constituted a large portion of the increase to the headline number. Stripping that out, however, helped result in the decline we saw in the core rate. With the CPI report (retail inflation) behind us, we'll now get the Producer Price Index (PPI) (wholesale inflation) this morning. Last month's PPI report came in slightly higher than expectations. The headline number was up 0.8% y/y vs. the consensus for 0.7%. But that was up from the previous month's 0.2%. The core rate was up 2.4%, in line with the previous month's 2.4%, but above the consensus for 2.3%. Today's report is expected to show the headline number up 0.4% m/m vs. last month's 0.3%. And 1.3% y/y vs. last month's 0.8%. The core rate is expected to be up 0.2% m/m vs. last month's 0.3% pace, while the y/y rate is expected to come in at 2.3% vs. last month's 2.4%. The report comes out at 8:30 AM ET. In other news, yesterday's MBA Mortgage Applications report was down -0.8% with purchases up 1.3% and refi's down -5.4%. In addition to today's PPI report, we'll also get Weekly Jobless Claims, Retail Sales, and Business Inventories. We're a little more than halfway thru the week, and the big 3 indexes are all less than a half percent above or below last week's close. Today's inflation report could possibly lead to a larger move one way or the other. But we might very well see a tight range heading into next week's FOMC Announcement on September 20. As it stands now, the odds of a rate hike this month are only at roughly 5%. But the odds shift to a 40% chance for a hike when they meet in November. Barring any significant surprises, it looks like we'll probably see a Fed pause next week. But what happens in November, not to mention December, is still up in the air. Either way, it does look like the Fed is near the end of their rate hike cycle (if they haven't hit it already). Once the terminal rate is set, the debate will then shift to how long we stay at those levels. But that comes later. Where the level stops comes first. See you tomorrow, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research [The Trading Strategy That Outpaces Almost Anything]( [image]( This millionaire's odd trading twist hasn't lost a dime in almost a decade! It's a simple 2-minute trade that hasn't posted a losing closed trade since BEFORE the pandemic. His odd strategy spits out winning trade after winning trade – 647 trades with 626 winners...0 losers... He doesn't mind this market chaos... In fact, the simple trading system he put in place THRIVES on it... His next trade goes live next Tuesday. 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