Yesterday’s market bounce on the better than expected US Consumer Price Index report is increasingly looking like a dead cat bounce. Although the NASDAQ gained 1.2% and the S&P 500 Index climbed 0.5% yesterday, the Russell 2000 only gained 0.2% and the Dow Industrials finished the day down 0.2%.
This morning finds US index futures down 0.3%-0.6% with NASDAQ futures leading the way back downward. In Europe today, the Dax is down 1.0% and the FTSE is down 0.2%. Commodity prices are also falling with Copper down 0.4%, Crude Oil down 0.6% and Natural Gas down 1.5%.
Gold is up 0.3% with the $3,000/oz round number in sight. This move, combined with falling stocks, indicates that investor sentiment remains cautious. Tariffs and the potential for a multi-front trade war between the US and pretty much everyone else appear to be front of mind, as trade tensions between the US and the EU rise with both sides threatening to increase tariffs.
US producer prices were better than expected, (3.2% vs street 3.3% and previous 3.7%). This news appears to be having a limited impact so far with investors focused more on trade and with it confirming yesterday’s consumer price report. US weekly initial jobless claims were better than expected as well (220K vs street 225K).