Wake Up Wall Street (SPY): CPI grinds market higher before PPI does it all over again
Here is what you need to know on Thursday, August 12:
Wednesday's CPI data was sufficiently in line to allow the market to continue its frustrating grind higher. Frustrating though only if you are short or bearish. That does appear to be the majority now as the put/call ratio squeezes up toward 1 and the Commitment of Traders report shows similar bearish tones. We get to do a Groundhog Day on Thursday in terms of inflation concerns as the Producer Price Index is out at 0830EST/1330GMT. The Fed will be closely watching again, with The Financial Times reporting Fed member Mary Daly saying that tapering could begin this year. True, it does have to start sometime, and look out below when it does. The correlation between SPY and the Fed balance sheet we have mentioned before. Basically, the Fed is the big buyer and when they step away it all goes kaput.
The dollar remains relatively flat at 1.1735 versus the euro, Gold is at $1,751, and Oil has calmed down a bit at $69. Bitcoin is just under $45,000 despite Messi getting paid some of his new salary in crypto. Kids these days!
The US 10-year yield never really pared gains in the last few days after yesterday's CPI, so this needs to be watched after the PPI today. Currently, the yield is 1.36%.
European markets are mostly higher: Eurostoxx +0.3%, Dax +0.4% and FTSE -0.3%.
US futures are flat: Dow is the biggest move at +0.1%.
SPY stock news and forecast
US PPI due at 0830EST/1330GMT.
Fed member Mary Daly says tapering of asset purchases could begin this year-FT.
Palantir Technologies (PLTR) just out with very strong earnings (see here). EPS and revenue beat and guidance increased. Cash flow forecast doubled! Up 6% premarket.
EBAY beats EPS estimates but was bearish on forecasts and users. Down 1% premarket.
Bumble (BMBL) EPS loss of 6c against estimates for a 1c profit. But revenue and user numbers are ahead, so stock is up 1% premarket.
McAfee (MCFE) down 12% premarket after rising 10% on Wednesday on the back of results.
KE Holdings (BEKE) down 12% premarket on results.
Coupang (CPNG) down 8% premarket on Q2 results. Deutsche Bank upgrades.
RIO Tinto (RIO) down 7% premarket as goes ex-dividend.
AppLovin (APP) should that be McLovin! Shares up 5% premarket as Q2 sales beat estimates.
BioNTech (BNTX) up 3% as California makes it mandatory for covid vaccine or covid testing for teachers and related staff and FDA due to authorize booster doses for some people later on Thursday. Also should benefit PFE, MRNA, NVAX, JNJ.
Micron (MU) was downgraded by Morgan Stanley.
Lordstown (RIDE) says on track to start small production by end of September.
Canopy Growth (CGC): Jefferies upgrades.
WIX.com (WIX) downgraded by Keybanc and Raymond James.
Upgrades, downgrades and premarket
Economic releases
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Author
Ivan Brian
FXStreet
Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.
