Market Update 8/11/23: Mixed Performance Following PPI Report in the Stock Market

Market Update

The 📈 stock market exhibited a mixed performance in today’s trading session, influenced by the latest Producer Price Index (PPI) report. As the closing bell rang, the Nasdaq 100 (NDX) and the S&P 500 (SPX) experienced declines of 0.67% and 0.1%, respectively. In contrast, the Dow Jones Industrial Average (DJIA) managed to gain 0.3%.

Key Points 📋

  • Mixed Performance: Today’s trading session saw a blend of gains and losses across major stock indices, driven by market reactions to the latest Producer Price Index (PPI) report.
  • Nasdaq 100 and S&P 500 Declines: The Nasdaq 100 (NDX) and the S&P 500 (SPX) recorded declines of 0.67% and 0.1%, respectively, reflecting the impact of the PPI report on technology and broader market sectors.
  • Dow Jones Industrial Average Gains: Despite the mixed performance, the Dow Jones Industrial Average (DJIA) managed to secure a gain of 0.3%, showcasing a degree of resilience in the face of market fluctuations.

Tech Sector Takes a Hit, Energy Sector Shines 📉🛢️

The technology sector (XLK) emerged as the laggard of the session, marking a loss of 0.7%. Conversely, the energy sector (XLE) took the lead, recording an impressive gain of 1.56%. This sectoral divergence contributed to the mixed overall market performance.

Treasury Yields Show an Uptick 📈💹

Notably, the U.S. 10-Year Treasury yield saw an increase to 4.17%, reflecting a rise of six basis points. Similarly, the Two-Year Treasury yield exhibited a similar upward trend, hovering around 4.89%. These yield movements suggest evolving market sentiment and interest rate expectations.

Last Updated: 3:00 PM EST

Consumer Inflation Expectations and Sentiment Analysis 📊😮

The University of Michigan’s preliminary results on consumer inflation expectations for the next five years were unveiled on Friday. Surprisingly, consumers now anticipate inflation to be at 2.9%, lower than the anticipated 3% and a decrease from the previous month.

When assessing consumer sentiment, the recorded value was 71.2, surpassing the anticipated 71. However, this represents a decline from the previous month’s reading of 71.6. Additionally, consumer expectations fell short of predictions. The month of August witnessed a reading of 67.3, compared to the forecasted 68.1. This decline mirrored the previous month’s result of 68.3.

Last Updated: 12:00 PM EST

Fueling Price Changes: Crude Oil and Gasoline ⛽🛢️

While stock indices displayed mixed movement in today’s trading session, the price of WTI crude oil exhibited an upward trajectory, surpassing $83 per barrel. This recent uptrend in crude oil prices exerted upward pressure on gasoline prices across the nation.

The national average for regular gasoline surged to $3.841 per gallon, marking an increase from the previous week’s reading of $3.831. Notably, California registered the highest gasoline prices, significantly exceeding the national average, at a staggering $5.11 per gallon. On the flip side, Mississippi emerged as the state with the most affordable gasoline prices, at $3.318 per gallon.

Last Updated: 9:30 AM EST

The stock market initiated Friday’s trading session on a lower note, with the Nasdaq 100 (NDX), S&P 500 (SPX), and Dow Jones Industrial Average (DJIA) experiencing declines of 0.76%, 0.46%, and 0.21%, respectively, as of 9:30 AM EST on August 11.

The wholesale inflation data released on Friday indicated a 0.3% increase in the producer price index for July, marking the most significant rise since January. Economists had anticipated a more modest 0.2% increase. The core producer price index, excluding food, energy prices, and trade services, also exhibited a notable increase of 0.2% in July, compared to a gain of 0.1% in June. This rise represented the most substantial increase since February.

First published: 2:14 AM EST

U.S. Futures and Inflation Outlook 📈🔍

U.S. Futures faced a downward trend on Friday morning, offsetting the positive impact of the recent cooling inflation print. Futures for the Nasdaq 100 (NDX), S&P 500 (SPX), and Dow Jones Industrial Average (DJIA) experienced declines of 0.23%, 0.12%, and 0.03%, respectively, as of 5:00 AM EST on August 11.

The Consumer Price Index (CPI) for July revealed a 0.2% increase from the previous month, with annualized inflation growth of 3.2%. While slightly lower than the expected 3.3% rise, this data has implications for the upcoming September FOMC meeting, where interest rate decisions will be closely watched. The Producer Price Index (PPI) report, scheduled for release at 8:30 AM EST, is expected to provide further insights into wholesale prices. Additionally, the preliminary reading of August’s consumer sentiment data is slated for later in the day.

The Nasdaq Composite and SPX are poised to conclude the trading week with negative performances, while the Dow could eke out a marginal gain. Notably, WTI crude oil prices dipped slightly, hovering around $82.70 per barrel. Concurrently, gold prices remained under pressure due to rising bond yields and a resilient U.S. Dollar. As the day unfolds, no notable earnings announcements are on the horizon.

European and Asia-Pacific Markets React 🌍📉

In the global arena, European indices experienced declines on Friday, influenced by a mixed bag of earnings releases. Noteworthy developments included the U.K.’s unexpected second-quarter GDP growth of 0.2%, surpassing expectations of a flat reading. Meanwhile, France’s core inflation, excluding food and gas, exhibited steady signs of decline, recording a 5% growth in July.

Across Asia-Pacific markets, the majority closed in the red on Friday, with Japanese markets remaining closed for the Mountain Day holiday. China’s real estate stocks continued to grapple with the deflationary environment, resulting in declines of 0.90% for Hong Kong’s Hang Seng index, and 2.01% and 2.18% for China’s Shanghai Composite and Shenzhen Component indices, respectively.

Moreover, Swiss banking institution UBS Group (NYSE:UBS) made significant announcements, revealing the termination of a $10.7 billion loss protection agreement and a 100 billion Swiss francs public liquidity backstop associated with its acquisition of Credit Suisse. This news propelled UBS Group shares nearly 5% higher in pre-market trading.

In conclusion, today’s market activity showcases a dynamic interplay of factors, including PPI data, consumer sentiment, inflation, and international developments. As investors navigate this intricate landscape, market participants remain vigilant for further insights that may shape near-term trends.

Note: This article provides a comprehensive overview of the recent stock market developments and economic indicators. It covers areas such as market performance, sectoral trends, inflation, consumer sentiment, and global market reactions. The presented analysis highlights key takeaways and implications for investors and traders.