US markets have turned downward in the last few minutes following the release of several significant economic reports which suggest a stagflationary environment heading into next week’s FOMC meeting. US Producer prices (1.9% vs street 1.1% and previous 0.9%) jumped upward, suggesting inflation pressures are starting to build again. US retail sales (0.6% vs street 0.8%, previous revised down to -1.1% from -0.8%) indicated a softer consumer spending environment than expected. Weekly US initial jobless claims (209K vs street 218K) suggest the job market is holding up at least.
The US 10-year treasury note yield has climbed back up above 4.20% on the hotter than expected inflation number. US index futures are trading flat to up 0.2%, down from gains of 0.3%-0.4% prior to today’s news. Yesterday US markets finished with a split decision as the Dow gained 0.1% and the NASDAQ lost 0.5%. Overseas action is mixed today, the FTSE is flat, the Dax is up 0.1%, the Nikkei gained 0.3% but the Hang Seng lost 0.7%.
Catching a tailwind from this week’s surprise drawdowns in US API and DOE oil inventories, US Crude Oil is up another 1.0% this morning and trading back up above $80.00/bbl, while Natural Gas is down 0.5%. Metals are soft with Copper down 0.2%, but holding above its $4.00/lb recent breakout point, Gold down 0.4% and Platinum down 0.3%. Crypto trading finds Bitcoin down 0.7% and Ether down 1.7%.
Homebuilder Lennar* is down 1.7% in premarket trading this morning despite crushing earnings estimates ($2.57 vs street $2.21), in what appears to be profit-taking against the news. Adobe reports after the close this afternoon.
*Shares of Lennar are held in some portfolios held by SIA Wealth Management.