Stocks Show Mixed Reactions To June Producer Inflation Data

Author: Michael Juliano | July 12, 2024 10:34am

Stocks gave varied reactions on Friday morning to the June Producer Price Index from the U.S. Bureau of Labor Statistics rising 0.2% on a monthly basis.

June PPI Report: Key Highlights

In June, the headline PPI for final demand rose by 0.2% month-over-month, rebounding sharply from the upwardly revised flat reading in May and surpassing economists' expectations – as tracked by TradingEconomics – of a 0.1% increase.
The June rise in the index for final demand is attributed to a 0.6% monthly increase in prices for final demand services, while the index for final demand goods decreased by 0.5%.
The 2.6% annual surge in the headline number represented a 0.2 percentage point increase from the upwardly revised May print, and topped estimates of 2.3%.
The core PPI – which tracks prices for final demand less foods, energy, and trade services – advanced at a 0.4% monthly pace, advancing from May's upwardly revised 0.3% growth and surpassing estimates of 0.2%.
On an annual basis, the core PPI climbed by 3.1%, up from the previous 2.3% and marking the highest rate of increase since April 2023.

Also Read: More Inflation Cheer As June PPI Lighter Than Expected, Lifting Markets Ahead Of Friday’s Bank Earnings

Before the PPI release, markets assigned a 6.7% probability of a rate cut to 5.00%-5.25% in July, a 91.7% chance of maintaining that range in September, and a 54.6% probability of a further cut to 4.75%-5.00% in November, according to the CME FedWatch Tool.

Treasury yields gave mixed reactions to the PPI data. The rate-sensitive two-year yield slipped to 4.485% before the market open, while the long-dated 10-year yield ticked up to 4.205%. The iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) slid 0.37%. The dollar fell slightly.

Gold, as tracked by the SPDR Gold Trust (NYSE:GLD), slipped 0.25%.

The S&P 500 index was up 0.65%, while the SPDR S&P 500 ETF Trust (NYSE:SPY), which tracks the S&P 500, ticked up 0.19% on Friday morning.

The tech-heavy Nasdaq Composite was up 0.71% on Friday morning to 18,412, while the Invesco QQQ Trust (NASDAQ:QQQ) picked up 0.15%.

Price Action: Retailers gave mixed reactions to the PPI data. Walmart Inc. (NYSE:WMT) was 0.42% lower at $69.48, while Amazon.com, Inc. (NASDAQ:AMZN) slipped 0.32% to $194.42.

SPDR S&P Retail ETF (NYSE:XRT) ticked 1.35% higher, while VanEck Retail ETF (NASDAQ:RTH) gained 0.45% and Direxion Daily AMZN Bull 2X Shares (NASDAQ:AMZU) declined 0.95% on Friday morning.

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