Stocks moved higher Thursday after a cooler-than-expected PPI report further reduced expectations for a September rate hike. This week’s cooler inflation data comes on the heels of last week’s weak jobs number, giving markets a favorable one-two punch on rate hike concerns.
Yields moved lower across the curve (though not massively), and oil pulled back a few dollars as well.
Yields - yields were lower across the board following the PPI report. The US10YY fell to 4.64%. The US2YY dropped 6 bps to 4.14%. The 2-year yield is now more than 20 bps below its late-July highs as weaker labor data and this week’s inflation data significantly reduced the odds of a Sept hike.
Oil - Crude declined to $81, providing another tailwind for equities on the day beyond PPI.
Dollar - The dollar was lower, but not by much. DXY is $99.97
Gold - Gold pulled back modestly after its recent surge but remains just above 4400 and near multi-week highs. Even with today’s pause, it has been one of the strongest-performing assets over the past several weeks.
Volatility - The VIX edged slightly higher to 14.75. At these levels, the move is largely insignificant. However, if the SPX continues to push higher and the VIX begins to rise alongside it, that could be a sign that upside call buying is beginning to accelerate.
Software outperformed semiconductors overall (WDAY helped there). Within semis, however, there were still some eye-catching moves, led by SNDK, which surged roughly 13%.
Communication Services - One of the stronger groups on the day. META contributed, but Telecom names including T, VZ, and TMUS were higher as well
Small Caps underwhelmed considering the move in yields.
SNDK +15% - Unveiled a long-term growth strategy at its 2026 Investor Day and said it expects mid-to-high-teens revenue growth through fiscal 2030.
CSCO -9%: despite strong Q2 sales and positive full-year guidance.
NFLX +4.5%: Bill Ackman expresses renewed confidence in streaming success
WDAY +18.%: Potential Silver Lake takeover
AMAT is lower by -3%, that’s well inside the expected move of 7%
Liz - We’re looking at inflation as the decision for cuts or hikes, and AI as the decision factor for whether the market continues higher.
Guy - There’s been volatility in crude, yet the equities (XLE) continue to do their thing.
Liz - I think you keep buying dips in energy, it has long term potential. Energy infrastructure is changing globally.
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Musk and Zuck make AI comebacks (Axios)
Friday, August 13th
Tomorrow is relatively quiet on the earnings front, but we do get Retail Sales and Michigan Consumer Sentiment
This week’s inflation data on the heels of last week’s weak jobs number has shifted rate expectations. Fed futures now imply a much lower probability of a September hike than they did just a few weeks ago. Tomorrow’s data fills in a few gaps on how consumers are faring.
8:30 AM - Retail Sales (MoM), Exp: 0.1%, Prev: 0.2%
10:00 AM - Michigan Consumer Sentiment Index, Exp: 54.5, Prev: 55.2
Analysis - KRE, BKX, TLT, Gold, GDX, XLE
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