Mr. Fibs - 2/16/24 Market Analysis
Housing Starts and PPI
Good morning traders and investors. This morning we had housing starts and PPI in the premarket the numbers came in as such:
US PPI YOY ACTUAL 0.9% (FORECAST 0.6%, PREVIOUS 1.0%)
US PPI MOM ACTUAL 0.3% (FORECAST 0.1%, PREVIOUS -0.1%)
US CORE PPI YOY ACTUAL 2% (FORECAST 1.6%, PREVIOUS 1.8%)
US CORE PPI MOM ACTUAL 0.5% (FORECAST 0.1%, PREVIOUS 0%)
US HOUSING STARTS NUMBER ACTUAL 1.331M (FORECAST 1.46M, PREVIOUS 1.460M)
US BUILDING PERMITS CHANGE MOM ACTUAL -1.5% (FORECAST 1.3%, PREVIOUS 1.8%)
The recent Producer Price Index (PPI) data reflects mixed inflationary pressures in the US economy. While the year-over-year (YOY) PPI came in slightly higher than expected at 0.9% compared to the forecasted 0.6%, the month-over-month (MoM) PPI exceeded expectations by rising 0.3% against the forecasted 0.1%. However, the core PPI, which excludes volatile food and energy prices, showed more moderate inflationary pressures, with the YOY core PPI at 2%, surpassing the forecasted 1.6%.
These PPI figures may indicate ongoing inflationary pressures, albeit at a more subdued pace than initially anticipated. The higher-than-expected PPI readings could raise concerns about future inflationary trends, prompting investors to adjust their expectations for potential Fed actions. If inflation persists or accelerates further, the Federal Reserve may consider tightening monetary policy to address rising price levels, potentially through interest rate hikes or tapering of asset purchases. As I mentioned in the analysis earlier this week, the contentious nature of not having continuously cold prints is something that some are looking for in the context of delayed rate cuts, meaning the next CPI/PPI prints and Fed’s policy response will likely tell us a lot.
In addition to the PPI data, the US housing market data showed a mixed picture, with housing starts falling short of expectations at 1.331 million compared to the forecasted 1.46 million. Similarly, the building permits change MoM came in below expectations at -1.5% versus the forecasted 1.3%. These figures suggest some softness in the housing market, which could be influenced by factors such as rising construction costs and supply chain disruptions.
Overall, the combination of mixed inflation data and softer housing market figures may lead to increased volatility in financial markets as investors reassess their outlook for inflation and economic growth. Additionally, these developments may influence expectations regarding the Federal Reserve's future monetary policy decisions, impacting asset prices across various sectors. Investors should closely monitor economic indicators and adjust their investment strategies accordingly to navigate changing market conditions.
We haven’t been paying to much attention to sentiment or chasing momentum and will keep focus on some of the ideas I mentioned earlier this week as the main actionable areas, pivots, and interim targets.
Mr. Fibs - 2/14/24 Market Analysis
Good morning traders and investors. Today’s post is an update of the riggers and levels as well as a plan for intraday. In the analysis, I will quickly mention my thoughts on how the CPI print yesterday is in line with some of the ideas I’ve had earlier this year for the rest of this week, big economic data is jobless claims and PPI. And next week we have FOMC meeting minutes released.
9:10 am Fed Vice Chair for Supervision Michael Barr speaks
10:00 am Consumer sentiment (prelim)
12:10 pm San Francisco Fed President Mary Daly speaks
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