Markets have been jittery this morning as investors react to news of rising inflation, with the Dow, S&P 500 and Nasdaq 100 futures all declining. At 7:20 AM Eastern Time, the Dow futures had declined by 20.00 points, the S&P 500 futures had dropped by 495.00 points, and the Nasdaq 100 futures had increased by 15.00 points.[0] Concerns have arisen over the Federal Reserve potentially increasing rates to a greater degree than predicted due to the release of reports on consumer and producer price inflation and retail sales.
The Federal Reserve will be paying close attention to inflation figures as they convene again next month.[1] [2] Concerns have been amplified by recent remarks from Fed officials, some of whom have suggested that the central bank may hike rates by an additional 0.50% in the coming month.
Monday, markets were closed in observance of President’s Day, with no notable reports scheduled for release.[3] On Tuesday, the Commerce Department’s Retail Sales for January will be published at 8.30 am ET, with the consensus expecting an increase of 1.7 percent. The Business Inventories for December will be issued at 10.00 am ET, with the consensus expecting an increase of 0.3 percent.[4]
The January consumer price index was due out at 8:30 ET (13:30 GMT). Analysts expected the monthly topline figure to rise 0.5% and the yearly figure to rise 6.2%. Core CPI, which excludes fuel and energy prices, was expected to rise 0.4% for the month and 5.5% for the year. The producer price index for January also came out at 8:30 ET (13:30 GMT). Analysts expected the monthly number to rise 0.4% and the yearly reading to rise 5.4%. Core PPI, which removed food and fuel, was expected to rise 0.3% for the month and 4.9% for the year.
The January consumer price index slightly exceeded estimates month-over-month: up 0.5% headline and up 0.4% core, excluding food and energy.[5] The year-on-year growth rate of 6.4% for the headline figure, and 5.6% for the core figure, is slightly higher than anticipated, though slightly lower compared to the previous[6] Stocks have been fluctuating following the announcement of retail inflation.[6]
0. “Wall Street Poised To Start Lower” RTTNews, 16 Feb. 2023, https://www.rttnews.com/3344652/wall-street-poised-to-start-lower.aspx
1. “Producer prices, Applied Materials, Constellation Energy: 3 things to watch” Yahoo! Voices, 15 Feb. 2023, https://www.yahoo.com/now/producer-prices-applied-materials-constellation-160225623.html
2. “Retail sales, Cisco earnings, Shopify results: 3 things to watch By Investing.com” Investing.com Canada, 14 Feb. 2023, https://ca.investing.com/news/stock-market-news/retail-sales-cisco-earnings-shopify-results-3-things-to-watch-2902781
3. “PCE Report Along with Retail and Tech Earnings Highlight Shortened Trading Week” InvestorsObserver, 20 Feb. 2023, https://www.investorsobserver.com/news/featured/pce-report-along-with-retail-and-tech-earnings-highlight-shortened-trading-week
4. “Wall Street Might Open Broadly In Negative Territory” RTTNews, 15 Feb. 2023, https://www.rttnews.com/3344275/wall-street-might-open-broadly-in-negative-territory.aspx
5. “5 things to know before the stock market opens Tuesday” CNBC, 14 Feb. 2023, https://www.cnbc.com/2023/02/14/5-things-to-know-before-the-stock-market-opens-tuesday-february-14.html
6. “The Club’s top 10 things Tuesday: CPI, volatile market, oil dips” CNBC, 14 Feb. 2023, https://www.cnbc.com/2023/02/14/the-clubs-top-10-things-tuesday-cpi-volatile-market-oil-dips.html