Wall Street Today | PPI Shows Largest Price Drop in Three Years
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RECAP
U.S. stocks rose Wednesday after a big day of gains sparked by low CPI data bolstered hopes for a soft landing.
The $Dow Jones Industrial Average (.DJI.US)$ rose 163 points, or 0.47%, the $S&P 500 Index (.SPX.US)$ or 0.16%, and the $Nasdaq Composite Index (.IXIC.US)$ was up 9.45 points, or 0.07%.
"Inflation -- for now -- is coming back down, and the economy -- for now -- continues to grow at a robust pace, so the only logical direction for stocks is higher," said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, told MarketWatch.
"The widely forecast 2023 recession never materialized, and although each year we escape recession brings us one year closer to the next one, forecasters should be humbled and have a lower conviction for their 2024 recession calls," he said.
MACRO
Reuters: US Producer Prices Unexpectedly Fall in October
The producer price index for final demand declined 0.5% last month, the largest decrease since April 2020, the Labor Department's Bureau of Labor Statistics said on Wednesday. Data for September was revised lower to show the PPI increasing 0.4% instead of 0.5% as previously reported.
Economists polled by Reuters had forecast the PPI edging up 0.1%. In the 12 months through October, the PPI increased 1.3% after 2.2% in September. Cooling inflation and slowing job and wage growth reinforced expectations that the U.S. central bank's fastest monetary policy tightening campaign since the 1980s was over.
Goods prices dropped 1.4% in October, with a 15.3 plunge in gasoline prices accounting for more than 80% of the decline. Goods prices rose 0.8% in September. Food prices fell 0.2%.
U.S. Retail Sales Dipped in October -- First Decline in Seven Months
Retailers' sales fell 0.1% in October and dropped for the first time in seven months, but the decline is unlikely to last as the U.S. enters the holiday shopping season. Excluding car sales, sales rose by 0.1%, compared to an expectation of a drop of 0.2% expected.
Economists polled by The Wall Street Journal had forecast a 0.2% drop in sales. It was the first negative reading since March, the government reported. Retail sales represent about one-third of all consumer spending and usually offer clues on the economy's strength.
SECTORS
Bloomberg: Oil Falls as US Crude Inventories Rise, Rate Concerns Flare Up
Oil fell after a government report showed swelling US crude inventories, and a Federal Reserve official signaled interest rates may remain elevated. US oil stockpiles rose 17.5 million in the last two weeks, the Energy Information Administration report on Wednesday showed. Crude extended declines after the Fed’s Mary Daly told the Financial Times that it’s too early to tell whether rate hikes have beaten inflation.
A jump in 10-year Treasury yields implies that rates will remain elevated, slowing the economy and hurting consumer spending, said Robert Yawger, director of the energy futures division at Mizuho Securities USA. West Texas Intermediate fell 2% to settle below $77 a barrel on Wednesday.
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COMPANIES
Nvidia Shares Pull Back from Record as Technical Indicator Signals Stock is Overbought
$NVIDIA (NVDA.US)$ shares pulled back, disrupting a rally that took the stock to a record. Despite the pullback, Nvidia is still up almost 200% in the past year. Shares of $Advanced Micro Devices (AMD.US)$ slipped 1.7%.
XPeng Earnings Beat Estimates. The Stock Falls as EV Concerns Persist
$XPeng (XPEV.US)$ announced an adjusted loss of $380 million from sales of $1.2 billion on Wednesday morning. Wall Street was looking for a $400 million loss and sales of $1.1 billion, respectively.
Target's Earnings Spark a Rally in Retailer Stocks
Investors love $Target (TGT.US)$'s latest earnings and retail sales data that slowed less than forecast. Other retail stocks are getting a lift.
JD.com Beats Estimates With 3Q Profit, Revenue Gains. Shares Rises 5%
Chinese e-commerce giant $JD.com (JD.US)$ beat analyst estimates for quarterly profit and revenue, helped by a better performance in its main business lines and cost controls.
Sirius XM Stock Is Surging after Berkshire Investment
$Sirius XM (SIRI.US)$ shares are moving higher Wednesday after $Berkshire Hathaway-B (BRK.B.US)$'s 13f regulatory filing came out, showing the dirt on multiple companies that moved based on whether Berkshire holds it
Cisco Dropped after Disappointing Forward Guidance
$Cisco (CSCO.US)$ shares drop nearly 9% post-market after cutting its full-year revenue forecast.
Source: Bloomberg, Dow Jones, CNBC
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