Last Updated: 4:25 PM EST
Stock indices finished today’s trading session in the green. The Nasdaq 100 (NDX), the S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) gained 0.59%, 0.55%, and 0.62%, respectively. This was despite a hotter-than-expected Producer Price Index (PPI) print for June. In fact, PPI, which measures the inflation of goods sold by manufacturers, increased by 0.2% on a month-over-month basis compared to the 0.1% rise economists had predicted. On a year-over-year basis, PPI increased by 2.6%, above the expected 2.3%.
Core PPI, which excludes food and energy prices, also picked up, with the monthly and yearly figures coming in at 0.4% and 3%, respectively. Analysts had expected a 0.2% increase for the former and a 2.5% jump for the latter.
Nevertheless, investors remain convinced that the Fed will start cutting rates this year. Indeed, the CME FedWatch Tool shows that investors are now pricing in an 88% chance of a rate cut happening in September compared to yesterday’s 85% and last week’s 72%.
In other news, the University of Michigan released its preliminary results on consumer inflation expectations over the next five years. Consumers now expect inflation to be 2.9%, which was lower than the expected 3% and fell compared to the previous month.
Taking a look at consumer sentiment, results came in at 66, which was lower than the expected 68.5. This is also a drop compared to last month’s reading of 68.2. In addition, consumer expectations came in lower than expected. July saw a print of 67.2 versus the forecast of 69.8
First Published: 3:30 AM EST
U.S. futures were near the flatline on Friday morning after a weak trading session yesterday. The decline came largely due to a sell-off in the Magnificent Seven stocks and major chip companies’ stocks. Futures on the Dow Jones Industrial Average (DJIA) and the S&P 500 (SPX) indices were up by 0.1% and 0.01%, respectively, at 3:17 a.m. EST, July 12, while the Nasdaq 100 (NDX) was down 0.15%.
In yesterday’s trading session, the S&P 500 and Nasdaq Composite indices broke their seven-day winning streak, closing down 0.88% and 1.95%, respectively. However, the Dow Jones index rose by 0.08%. The tech sell-off was triggered by a cooler-than-expected consumer inflation report.
In major economic reports due today, investors are looking forward to the release of the wholesale inflation data represented by the Producer Price Index (PPI). Further, July’s preliminary readings of the Michigan Consumer Sentiment Index are scheduled for release today.
Moving to corporate earnings, three major banks, namely Citigroup (C), JP Morgan Chase (JPM), and Wells Fargo (WFC), are set to release their earnings reports today.
Meanwhile, the U.S. 10-year treasury yield is up at the time of writing, floating near 4.22%. At the same time, WTI crude oil futures trended higher, hovering near $83.21 per barrel as of the last check.
Elsewhere, European markets are expected to open higher today as investors look forward to upcoming inflation data from the U.S., Germany, France, and Italy.
Asia-Pacific Markets Traded Mixed on Friday
Asia-Pacific indices traded mixed today. The Hong Kong markets gained from renewed hopes of interest rate cuts in the U.S. At the same time, Japanese stocks declined due to fears of 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 gained 0.03%. However, China’s Shenzhen Component was down 0.18%. Further, Japan’s Nikkei and Topix indices finished lower by 2.45% and 1.18%, respectively.
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