Stocks Lower in Another Volatile Session…..
U.S. equities finished out the holiday-shortened week lower in yet another bumpy trading session. Nervousness surrounding the Delta variant and Fed tapering timing persisted, while investors also digested another hotter-than-expected read on wholesale price inflation, which comes amid festering supply-chain issues. On the equity front, Affirm Holdings rallied after topping operating earnings forecasts and offering upbeat guidance, while shares of Take-Two Interactive Software suffered after it delayed the release of the latest versions of its popular Grand Theft Auto video game, Kroger Co. dropped after it missed margins forecasts, despite posting upbeat Q2 results and full-year guidance, and Apple received a disappointing ruling in a legal battle. Treasuries were lower, putting upward pressure on yields, and the U.S. dollar nudged to the upside, while gold lost ground, and crude oil prices rose. Europe finished mostly lower to close out the week, while markets in Asia were higher.
The Dow Jones Industrial Average declined 272 points (0.8%) to 34,608, the S&P 500 Index fell 35 points (0.8%) to 4,459, and the Nasdaq Composite decreased 133 points (0.9%) to 15,115. In moderate volume, 776 million shares were traded on the NYSE and 4.5 billion shares changed hands on the Nasdaq. WTI crude oil gained $1.58 to $69.72 per barrel. Elsewhere, the gold spot price fell $10.50 to $1,789.50 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—moved 0.1% higher to 92.60.
Wholesale price inflation comes in hotter than expected…..
The Producer Price Index (PPI) ,showed prices at the wholesale level in August rose 0.7% month-over-month (m/m), above the Bloomberg consensus estimate calling for a 0.6% gain, but below July’s 1.0% increase. The core rate, which excludes food and energy, gained 0.6% m/m, in line with estimates and south of the prior month’s 1.0% gain. Y/Y, the headline rate was 8.3% higher, above projections of an 8.2% increase and compared to July’s 7.8% gain. The core PPI increased 6.7% y/y last month, topping estimates calling for a 6.6% rise, following July’s 6.2% increase.
July wholesale inventories remained at a 0.6% m/m gain, matching estimates and compared to June’s 1.2% increase. Sales rose 2.0% after June’s upwardly-adjusted 2.3% gain.
Treasuries were lower, as the yield on the 2-year note was flat at 0.22%, while the yields on the 10-year note and the 30-year bond gained 4 basis points to 1.34% and 1.94%, respectively. The U.S. dollar modestly added to a gain it has seen this week.
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