Stocks Add To Rally After Better Than Expected PPI Inflation Report

Market Moves You Need to See Stocks Add To Rally After Better Than Expected PPI Inflation Report [Kevin Matras - EVP - Photo] Profit from the Pros By Kevin Matras Executive Vice President Stocks Add To Rally After Better Than Expected PPI Inflation Report [Stocks Add To Rally After Better Than Expected PPI Inflation Report]Image: Shutterstock Stocks closed modestly higher yesterday, adding to Tuesday's sharp gains. Yesterday's better than expected Producer Price Index (PPI) report showed headline inflation fell -0.5% m/m vs. last month's 0.4% and views for 0.1%. On a y/y basis it came in at 1.3% vs. last month's 2.2% pace and the consensus for 2.0%. Core inflation (ex-food & energy) was flat at 0.0% m/m vs. last month's 0.2% pace and views for 0.3%. On a y/y basis it came in at 2.4% vs. last month's 2.7% and estimates for the same. Between Tuesday's better than expected Consumer Price Index (CPI) (retail inflation), and yesterday's PPI report (wholesale inflation), it shows a picture of significant improvement with inflation on the decline. And it's giving strong signals to the Fed that they may not need to hike rates any further. After pausing on rates for two meetings in a row, there's a growing likelihood that they may pause yet again when they meet in December (12-13), and possibly call it quits. While nobody is calling for the Fed to lower rates this year, the Fed itself is suggesting they could lower rates by -50 basis points next year, bringing the Fed Funds rate down to a midpoint of 4.88%. But UBS came out with a report on Tuesday forecasting the Fed will cut rates next year to a target range of 2.50% to 2.75% (midpoint of 2.63%). That suggests interest rate cuts of -2.75%. Granted, that assumes the U.S. economy falls into a recession. But the first cuts are expected to come before that as inflation continues to go down and the neutral rate shifts down along with it. We shall see how that all plays out. But their estimates for deep interest rate cuts of -2.75% is likely making people think that the Fed's -50 basis point forecast is much too low. In other news, yesterday's MBA Mortgage Applications were up 2.8% w/w with purchases up 3.3% and refi's up 2.0%. Retail Sales slowed less than expected dipping -0.1% m/m vs. last month's upwardly revised 0.9% and views for -0.3%. Ex-vehicles it was up 0.1% vs. last month's 0.8% and estimates for -0.1%. The Empire State Manufacturing Index jumped to 9.1 vs. last month's -4.6 and forecasts for -3.0. Business Inventories were up 0.4% m/m, in line with last month's pace and views for the same. And the Atlanta Fed Business Inflation Expectations ticked up to 2.5% for the year-ahead period vs. last month's 2.4%. Today we'll get Weekly Jobless Claims, the Philadelphia Fed Manufacturing Index, Import and Export Prices, Industrial Production, and the Housing Market Index. We'll also get more earnings. Yesterday's better than expected earnings by retail giant Target, before the open, when they reported a positive EPS surprise of 41.9%, and a positive sales surprise of 0.62%, sent shares soaring by 17.8%. Although, after the close, tech company Cisco posted a positive surprise of 7.77%, and a positive sales surprise of 0.40%, but offered weak guidance for the next quarter, and full fiscal year. Shares were up 0.21% in the regular session, before earnings, but were down more than -11% in after-hours trade. Today we'll hear from 149 companies, including retail names like Walmart, Alibaba, and Macy's before the open. And varied names like Applied Materials, Copart, and Compass Minerals after the close. Stocks have put in a blistering rally over the last 3 weeks. And the Q4 rally looks like it has much more to go. See you tomorrow, [Kevin Matras - Signature] Kevin Matras Executive Vice President, Zacks Investment Research [Get Your Free Copy of Finding #1 Stocks - A $49.95 Value]( Starting today, you can claim a free copy of Finding #1 Stocks by Zacks' EVP Kevin Matras. You don't even have to pay for shipping! Its 300 pages unfold virtually every trading secret he has learned over the last 25 years to beat the market. Here's what's inside: - Exact formulas of strategies that produced gains up to +15.6%, +38.9%, and even +39.7% while the market dropped -18.2% in 2022… - How to spot bullish set-ups and bearish break-downs to stay ahead of the market… - Traits to determine the type of trader you are and finding stocks with highest probability of success… - Kevin's personal all-time favorite screening strategy… - And much more! This limited-time offer will end Saturday, November 19 or when our inventory is depleted. Don't miss this unique opportunity. [Get your FREE book now »]( Most Popular Articles from Zacks.com [3 Top Ranked Growth Stocks Investors Can Buy Now]( With lower interest rates in sight, growth stocks look to be major beneficiaries. [Read More »]( [3 Big Winners on Signs of Inflation Cooling Down]( We have highlighted three stocks most likely to make the most of less inflationary pressure. [Read More »]( [5 Must-Buy High-Flying Mid-Cap Stocks With More Upside Left]( Each of these mid-cap stocks carries a Zacks Rank #1 (Strong Buy) and has gained nearly 50% or above returns year to date. [Read More »]( [5 Stocks to Keep a Tab On Following Upgrades by Brokers]( These recently upgraded stocks should be on your radar for healthy returns. [Read More »]( [5 ETFs to Tap Nvidia's Historic Surge]( NVDA has soared 22% since the start of November and added an astounding $220 billion in market value. [Read More »]( [Your Exclusive Access to Today's Top ETFs]( Use Zacks ETF Rank to help you select the very best ETFs for your portfolio. This quantitative ratings system takes into account asset class forecasts as well as several ETF-specific factors. All to give you a comprehensive account of a fund's potential before you invest your money. [See Today's Top-Ranked ETFs »]( [Bull of the Day: Construction Partners (ROAD)]( The civil infrastructure company has been making a series of 52-week highs. [Read More »]( [New Zacks Strong Buys for November 16th]( Here are 5 stocks added to the Zacks Rank #1 (Strong Buy) List today. [Read More »]( More Zacks Resources Mobile App Download our app for convenient on-the-go access to even more—daily and weekly newsletters published by Zacks experts, proprietary research and tools, and Portfolio Tracker on Zacks.com. [Download our Zacks App for Apple iOS]( [Download our Zacks App for Android]( Zacks Members' Success Stories Visit [Success Stories]( to hear how Zacks research, tools and portfolios help our members outperform the market. Get all of our market insights and much more when you connect with us. [Visit Zacks on Facebook]( [Follow Zacks on Twitter]( [See Zacks videos on YouTube]( [Join Zacks on LinkedIn]( [Read Zacks Commentary on StockTwits]( This free resource is being sent by [Zacks.com](. We look for investment resources and inform you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms of Service". [www.zacks.com/terms_of_service]( Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research is not a licensed securities dealer, broker or US investment adviser or investment bank. The Zacks #1 Rank Performance covers the period beginning on January 1, 1988 through October 2, 2023. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank #1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit [( for information about the performance numbers displayed above. Zacks Emails If you would prefer to not receive future profit-producing emails from [Zacks.com]( the primary purpose of which is the commercial advertisement or promotion of a commercial product or service, then please [click here]( and confirm your request. If you have trouble with the unsubscribe link, please email support@zacks.com. Zacks Investment Research 10 S. Riverside Plaza, Suite 1600 Chicago, IL 60606