A1 Trading Company

March 14, 2024

PPI Data Shakes Up the Markets

Frank Cabibi

PPI and retail data came out this morning adding to the tumultuous news in the US. Commodities have taken this in a mixed way, indices are slightly down for the day at the time of writing this, and the dollar is up.

EdgeFinder Analysis

USOil is now a +7 on the EdgeFinder after moving up 4 points today in the score system. The US reported higher PPI and retail sales this morning which added strength to the commodity. The combination of this and hotter inflation has been good for oil prices.

Oil is now making moves for the first time out of the rangebound area and is topping the high for the first time since March 6th. The categories that brought up oil's score were labor market, economy and trend reading.

Gold is down today and is probably taking a break from the recent consecutive days of running higher. Higher retail sales from last month was probably taken negatively for gold as it wants to see worse economic conditions.

However, PPI was also higher. The Producer Price Index is a measure of inflation which also went higher today. With mixed news, gold may consolidate between the all time highs and the previous high around $2,148 for at least this week.

NAS100 is a neutral reading with the rest of the US indices right now. Yesterday's score was 0 and today is +3. This move is due to the retail sales news that came out this morning. The categories that moved the index score came from the Economy tab and our Labor market scoring tab which looks at weekly unemployment claims.

Stocks are overextended for sure, but there are a lot of factors that keep investors from becoming overexposed to the market. What we have mentioned before is the potential stagflation issue happening in the US. Higher CPI and lower GDP and slower labor numbers can lead to a weaker stock market and USD.

Retail Spotlight

Retail is still short indices and is now mixed USOil. JP225 is now shorted by the crowd and most USD pairs are mixed.

Smart Money Spotlight

Retail bullish sentiment is declining while smart money continues to buy the commodity. The price is more so reflecting COT activity which anticipates higher oil prices in the future.

Fundamental Spotlight

Unemployment Claims came in lower for this week which can also be interpreted as a healthy sign for the labor market in the US. Higher retail sales could be a good sign for the indices as well.

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