The day started with a steep decline into the red, the Dow down over 250 points by 11 a.m., then steadily recovering all three with handsome gains by close for both the S&P and Nasdaq, and the Dow ending even. Though there’s no commentary below about the morning dive, the recovery was clearly due to the PPI report coming in with considerably more encouraging inflation data than yesterday’s CPI report which sent the whole market into a dramatic tailspin.
The new data supplied support that inflation was continuing to cool with the monthly increase being just 1/3 of last month’s (0.2% vs 0.6%) even if the yearly increase was still higher (2.1% vs February’s 1.6%) but still better than yesterday’s CPI. The hope is that in coming months the PPI will filter down to consumer prices. But truly, the real impetus to today’s high numbers is yet another investor flip-flop. As today’s expert put it, “There’s a suggestion that the inflation numbers the Fed really cares about – the PCE numbers – aren’t going to be quite as dire as CPI.” Wow, any excuse to send the market up. Wall Street! Gotta love it! In just one day, volume is below average again at 10.4 billion.
S&P 500, Nasdaq end sharply higher
on soft inflation data, eyes on earnings
By Stephen
Culp
Thu April 11, 2024 4:17 PM
DJ: 38,461.51 -422.16 NAS: 16,170.36 -136.28 S&P: 5,160.64 -49.27 4/10
DJ: 38,459.08 -2.43 NAS: 16,442.20 +271.84 S&P: 5,199.06
+38.42 4/11
NEW YORK, April 11 (Reuters) - U.S. stocks closed higher on Thursday, with tech-related
momentum stocks leading the charge, as fresh economic data rekindled hopes that
inflation remains in a cooling trend. Interest
rate-sensitive megacaps gave the tech-heavy Nasdaq a decisive edge. The S&P
500 also closed in positive territory, while the Dow ended essentially
unchanged. The Producer Prices index
(PPI) came in softer than expected, supporting the narrative that price growth
is still cooling.
"The
data this morning was mildly more supportive of sort of a benign 'soft landing'
outcome than the data yesterday," said Brian Nick, senior
investment strategist at Macro Institute. "I guess it feels like a natural
kind of snapback from,
what was potentially an overreaction yesterday." On Wednesday, hotter-than-expected CPI data sent stocks sharply lower and
benchmark Treasury yields to their highest level since November. The report
doused hopes that the central bank could implement as many as three rate cuts
before year-end, possibly starting as soon as its June policy meeting.
"There’s a suggestion that the inflation numbers the Fed really cares about - the PCE numbers - aren't going to be quite as dire as CPI," Nick added. "And the parts of the market that were most punished yesterday are having a bit of a comeback today."
While the PPI data was
more encouraging, the data did
indicate that inflation's
journey down toward the central bank's annual 2% target might be too meandering for the Fed. New York Fed President John Williams said "there's no clear need to adjust
monetary policy in the very near term." Richmond Fed President Thomas Barkin said the central bank is not yet confident pricing
pressures will continue to ease. "Investors are starting to
absorb the possibility that maybe inflation could linger just a little
bit longer and the Fed's
going to continue to remain patient, which is their big word right
now," said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. Investors now switch their focus to first-quarter earnings season, with results
from three major U.S. banks - JPMorgan Chase & Co (JPM.N), opens new tab, Citigroup
Inc (C.N), opens new tab, and Wells
Fargo & Co (WFC.N), opens new tab - due Friday morning.
The Dow Jones Industrial
Average (.DJI), opens new tab fell
2.43 points, or 0.01%, to 38,459.08, the S&P 500 (.SPX), opens new tab gained
38.42 points, or 0.74%, to 5,199.06 and the Nasdaq Composite (.IXIC), opens new tab added
271.84 points, or 1.68%, to 16,442.20. Of the 11 major sectors in the S&P 500,
tech (.SPLRCT), opens new tab was
out front, while financial shares (.SPSY), opens new tab were
the laggards. The FANG+ index of megacap momentum
stocks (.NYFANG), opens new tab was
a clear outperformer, gaining
2.6%.
CarMax(KMX.N), opens new tab slid
9.2% after the pre-owned vehicles retailer missed analysts' estimates for
fourth-quarter results and said it might not meet its long-term vehicle sales
target. Globe Life(GL.N), opens new tab tumbled
53.1% after Fuzzy Panda Research disclosed a short position in the company,
alleging multiple instances of insurance fraud.
Rent the Runway(RENT.O), opens new tab skyrocketed
by 161.9% after the apparel rental company said it was betting on artificial
intelligence to power its current year growth.
Biotech firm Alpine Immune Sciences(ALPN.O), opens new tab is
to be acquired by Vertex Pharmaceuticals (VRTX.O), opens new tab for
about $4.9 billion in cash, both companies said. Alpine surged 36.9%.
Advancing issues outnumbered declining ones on the NYSE by a
1.12-to-1 ratio; on Nasdaq, a 1.23-to-1 ratio favored advancers. The S&P 500 posted 11 new 52-week highs
and 6 new lows; the Nasdaq Composite recorded 51 new highs and 135 new lows.
Volume on U.S. exchanges
was 10.39 billion shares, compared with
the 11.48 billion average for the full session over the last 20 trading days.
And from another article:
Tame US producer price data soothes
inflation concerns
April 11, 20241:54 PM EDTUpdated 6 hours ago
"Producer
prices tell us that inflation is not worsening, yet," said
Christopher Rupkey, chief economist at FWDBONDS. "Policymakers can remain vigilant as they
await more data on where inflation is heading next. Tamer producer prices may
spell some relief for consumers in coming months."
The producer
price index for final demand rose 0.2% last month after increasing by an
unrevised 0.6% in
February, the Labor Department's Bureau of Labor Statistics said.
Economists polled by Reuters had forecast the PPI would gain 0.3%. In the 12 months through March, the PPI advanced 2.1% after
rising 1.6% in February.
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