Following the decline in the annual growth rate of the U.S. consumer price index (CPI) in July yesterday, the annual growth rate of the producer price index (PPI) announced on Thursday (11th) also declined, of which the monthly growth rate of PPI appeared The negative growth for the first time in two years will further bring good news for inflation, and encourage the four major U.S. stock indexes to open higher and higher.
Before the deadline, the Dow Jones Industrial Average rose nearly 250 points, or nearly 0.75%, the Nasdaq Composite rose more than 100 points, or nearly 0.8%, the S&P 500 rose nearly 0.8%, and the Philadelphia Semiconductor Index rose more than 1.5%.
According to data released by the U.S. Department of Labor, PPI increased by 9.8% in July, lower than market expectations of 10.4% and 11.3% in June; the monthly growth rate of PPI in July was negative by 0.5%, market expectations were 0.2%, and the previous value was revised. The latter was 1%, the first negative value since April 2020.
Core PPI unexpectedly turned negative for the first time in more than two years in July, largely reflecting lower energy costs and representing a welcome easing of inflationary pressures.
It is worth noting that PPI has exceeded CPI for 19 consecutive months, which means that US companies are still facing huge pressure on profit margins.
In addition, the number of people who received initial unemployment benefits last week reported on the same day was 262,000, an increase of 14,000 from the previously revised 248,000, a two-week increase in a row, slightly lower than the market expectation of 263,000, and close to the number since November last year. New highs, revealing a continued slowdown in the job market.
In terms of monetary policy, Minneapolis Federal Reserve Bank President Neel Kashkari still maintains his view that the federal funds rate will rise to 3.9% by the end of this year and 4.4% by the end of next year.
Chicago Federal Reserve Bank President Charles Evans said that July’s CPI did not accelerate any more and was the first “positive” inflation data since the Fed started raising interest rates, but he believed that the Fed was trying to suppress inflation. Still need to continue to raise interest rates. He supports interest rates rising to 3.25-3.50% by the end of this year and 3.75-4.0% by the end of next year.
San Francisco Fed President Mary Daly said it was too early to declare victory over inflation. She sees interest rates rising to 3.5% by the end of the year, while not ruling out a three-point rate hike at the Federal Reserve’s September meeting.
On the energy front, the International Energy Agency (IEA) raised its forecast for demand growth this year. Soaring natural gas prices and heat waves prompted industrial and power generation companies to switch fuel to oil, and crude oil prices rose on the news. By contrast, the Organization of the Petroleum Exporting Countries (OPEC) forecasts a surplus in the global oil market this season.
In terms of cryptocurrencies, Ethereum 2.0 is in the final stage, and the third test chain is currently testing the merger. Once completed, all upgrade preparations are complete, encouraging the price of Ethereum to rise to a new high in two months. At press time, ether was up 3.8 percent in 24 hours at $1,905.25, according to CoinGecko data.
As of 21:00 on Thursday (11th) Taipei time:
Stocks in focus:
Sonos (SONO-US) fell 22.44% premarket to $17.66 per share
Smart speaker maker Sonos announced third-quarter earnings before the market. Affected by U.S. dollar exchange losses and inflation, consumer sentiment was affected. Revenue fell 1.8% year-on-year to $371 million, far below market expectations of $420 million. Earnings per share Reported $0.19, better than market expectations of $0.06. Sonos shares tumbled more than 20% in premarket trading.
Sonos also lowered its full-year financial forecast, predicting annual revenue of between $1.73 billion and $1.76 billion, compared with the previous estimate of $1.95 billion to $2 billion, far below Wall Street’s forecast of $1.96 billion. In addition, Sonos previously announced that it will extend its timeframe to achieve its goals of $2.5 billion in annual revenue, 45-47% gross margin and 15-18% adjusted EBITDA margin beyond 2024.
Six Flags (SIX-US) fell 21.93% to $20.15 a share in early trade
U.S. theme park maker Six Flags reported bleak financial results for the last quarter before the market, with revenue and profit far below Wall Street analysts’ expectations. Revenue fell by more than 20%, and the stock price fell nearly 13% before the market.
Bumble (BMBL-US) rose 0.52% to $34.67 a share in early trade
Dating app Bumble lowered its full-year revenue forecast, sending its shares down nearly 9 percent in premarket trading. In addition, Bumble faces stiff competition from rivals such as Tinder parent company Match Group (MTCH-US), and its popular dating app Badoo in Western Europe has also been affected by the Russian-Ukrainian war.
Today’s key economic data: US July PPI annual growth rate reported 9.8%, expected 10.4%, the previous value of 11.3% US July PPI monthly growth rate reported -0.5%, expected 0.2%, the previous value of 1% US July core PPI year The growth rate was reported at 7.6%, expected 7.6%, the previous value of 8.4%, the monthly growth rate of core PPI in the United States in July reported 0.2%, expected 0.4%, the previous value of 0.4% The number of Americans receiving unemployment benefits last week reported 262,000, expected 263,000, The previous value of 248,000 The number of people receiving unemployment benefits in the United States last week reported 1.428 million, the expected 1.407 million, and the previous value of 1.42 million Wall Street Analysis:
Lewis Grant, head of global equities at Federated Hermes, said that despite the Fed’s hawkish speeches, recent news of cooling inflation has given investors hope that the pace of Fed rate hikes will slow down, and the long-debated soft landing does not appear to be in sight. Investors expected so difficult to achieve.
Oanda senior market analyst Craig Erlam said that with the good news from the US inflation data calming the entire market, investor sentiment must be more optimistic.