Stocks Jump, Even Amid More Spicy Inflation Data…..

U.S. equities finished solidly higher, paring back some of yesterday’s sharp downdraft that came in the wake of a hotter-than-expected consumer price report that stoked inflation worries. The markets have been shaken lately, as indications of heating up inflation have fueled anxiety as to how it could affect the Federal Reserve’s timing in reining in its extremely-accommodative monetary policy. But, the markets showed resiliency in the face of another stronger-than-expected read on wholesale price inflation. The Information Technology sector led a broad-based advance, but Energy issues lagged as crude oil prices were sharply lower as a key energy pipeline in the U.S. gets back online after a cybersecurity attack last weekend. Treasuries were higher, applying pressure to yields, and the U.S. dollar was little changed following yesterday’s noticeable bounce, while gold gained ground. On the equity front, shares of Vroom and Sonos both benefitted from their respective earnings reports. Europe was able to overcome some early losses to finish mixed amid the strength in technology stocks, while markets in Asia finished broadly lower.

The Dow Jones Industrial Average rose 434 points (1.3%) to 34,021, the S&P 500 Index increased 49 points (1.2%) to 4,113, and the Nasdaq Composite advanced 93 points (0.7%) to 13,125. In heavy volume, 1.0 billion shares were traded on the NYSE and 4.6 billion shares changed hands on the Nasdaq. WTI crude oil tumbled $2.26 to $63.82 per barrel. Elsewhere, the Bloomberg gold spot price gained $11.39 to $1,827.08 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was little changed at 90.69.

Wholesale price inflation hotter than expected, jobless claims continue to decelerate…..

The Producer Price Index (PPI), showed prices at the wholesale level in April rose 0.6% month-over-month (m/m), above the Bloomberg consensus estimate calling for a 0.3% gain, and compared to March’s 1.0% increase. The core rate, which excludes food and energy, rose 0.7% m/m, north of estimates of a 0.4% increase and matching the prior month’s gain. Y/Y, the headline rate was 6.2% higher, topping projections of a 5.8% gain, and versus the prior month’s 4.2% rise. The core PPI increased 4.1% y/y last month, above estimates of a 3.8% increase and March’s 3.1% rise. The Bureau of Labor Statistics said about two-thirds of the April advance can be traced to increased prices for services, while prices for goods also moved higher.

Weekly initial jobless claims came in at a level of 473,000 for the week ended May 8, better than estimates of 490,000, and compared to the prior week’s upwardly-revised 507,000 level. The four-week moving average fell by 28,250 to 534,000, and continuing claims for the week ended May 1 dropped by 45,000 to 3,655,000, just north of estimates of 3,650,000. The four-week moving average of continuing claims declined by 13,250 to 3,665,000.

Treasuries were higher, as the yields on the 2-year note and the 30-year bond ticked 1 basis point  lower to 0.16% and 2.40%, respectively, while the yield on the 10-year note declined 4 bps to 1.65%.

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