Last updated: 10:30 AM EST
Stock indexes are currently up in today’s trading despite the fact that the Producer Price Index (PPI) for June came in better than expected. In fact, the PPI, which measures inflation in the prices of goods sold by manufacturers, rose 0.2% month-on-month versus the 0.1% increase economists had predicted. Year-on-year, the PPI rose 2.6%, beating expectations of 2.3%.
Core PPI, which excludes food and energy prices, also rose, to 0.4% monthly and 3% annually, respectively. Analysts had expected a 0.2% increase in the former and a 2.5% rise in the latter.
Still, investors remain confident the Fed will start cutting rates this year. In fact, investors now see a nearly 90% chance of a rate cut in September, compared with 85% yesterday and 72% last week, according to the CME FedWatch tool.
Premiere: 3:30 AM ET
U.S. futures were roughly flat on Friday morning after a weak trading session yesterday. The decline was largely driven by selling in the Magnificent Seven stocks and shares of major semiconductor companies. Dow Jones Industrial Average futures (DJIA) and the S&P 500 (Spocks) index was up 0.1% and 0.01%, respectively, as of 3:17 a.m. ET on July 12, while the Nasdaq 100 (Nedix) fell 0.15%.
In yesterday’s trading session, the S&P 500 and Nasdaq Composite Indexes ended their seven-day winning streak, closing down 0.88% and 1.95%, respectively, while the Dow Jones Index rose 0.08%. The selloff in tech stocks was triggered by a weaker-than-expected Consumer Price Index report.
Among the major economic reports due for release today, investors are eagerly awaiting the release of wholesale inflation data, represented by the Producer Price Index (PPI), as well as the release of preliminary July readings of the Michigan Consumer Sentiment Index.
Looking at corporate earnings, Citigroup (C), JPMorgan Chase (JPM), Wells Fargo (World Economic Forum) is scheduled to release its earnings report today.
Meanwhile, the 10-year U.S. Treasury yield is rising and hovering around 4.22% at the time of writing. At the same time, WTI crude oil futures are also on an upward trend, hovering around $83.21 per barrel as of last check.
Meanwhile, European markets are expected to open higher today as investors look forward to upcoming inflation data from the US, Germany, France and Italy.
Asia-Pacific markets traded mixed on Friday
Asia-Pacific stock indexes were mixed today, with Hong Kong rising on renewed hopes of a US interest rate cut, while Japanese shares fell on concerns over government intervention in the foreign exchange market.
At the time of writing, Hong Kong’s Hang Seng Index was up 2.61%. Similarly, China’s Shanghai Composite Index was up 0.03%. However, China’s Shenzhen Index was down 0.18%. Furthermore, Japan’s Nikkei and TOPIX indexes ended down 2.45% and 1.18%, respectively.
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