Don’s Notebook May 9, 2018

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Don’s Notebook May 9, 2018

Producer prices open three straight days of inflation data. Today’s announcement, the Producer Price Index (PPI) of the Bureau of Labor Statistics (BLS) is a family of indexes that measures the average change over time in the prices received by domestic producers of goods and services.

  • Prices are up for steel and aluminum but overall wholesale prices proved subdued in April.
    • Steel products rose a steep 3.2 percent in April vs a 1.9 percent rise in March when tariffs were first imposed, with aluminum up 1.8 percent in April after a 1.4 percent rise in March.
    • Year-on-year rates are very elevated: up 7.4 percent for steel and 11.9 percent for aluminum.
    • The headline increase of 0.1 percent was in line with analyst expectations.
  • When excluding food, (where prices fell 1.1 percent), and energy, (which inched only 0.1 percent higher), producer prices did show a 0.2 percent increase.

Overnight markets were mixed:

  • The MSCI Asia Pacific Index lost 0.3 percent.
  • Japan’s Topix index closed 0.4 percent lower despite the yen weakening against the dollar.
  • In Europe, the Stoxx 600 Index was 0.2 percent higher at 5:45 a.m. with energy-related shares by far the best performers on the back of rising crude prices.
  • S&P 500 futures pointed to a gain at the open and gold slipped.

Earnings today include: Softbank Group, Marriott International, Siemens, Toyota Motor, Liberty Media, Mylan, Glaukos and Vitamin Shoppe.

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