Stocks got the week off to a mixed start, but the Dow Jones Industrials carved out a fresh all-time high. As we look to today’s open, the futures are indicating the major indexes will start the session sharply lower. In overnight trading, markets in Asia were mixed. Meanwhile, the major European exchanges are all in the red. Elsewhere, oil prices have moved higher, with West Texas Intermediate up about 0.7%, to around $77.50 a barrel. Corporate earnings season continues to roll along at a good pace. Among the larger names reporting this week are Cisco (CSCO), Applied Materials (AMAT), and Deere & Company (DE).
In economic news, this morning we got the Consumer Price Index (CPI) for January from the Bureau of Labor Statistics. The report, which is closely monitored by Federal Reserve officials, showed that prices increased 0.3% on a month-to-month basis and 3.1% over the trailing 12-month period. These figures matched December’s readings, but were slightly above Wall Street’s expectations of 0.2% and 2.9%, respectively. Meanwhile, core prices, which leave out volatile food and energy costs, were up 0.4% on a monthly basis, versus the consensus of 0.3% and December’s reading of 0.3%. Year over year, core prices increased 3.9%, versus expectations of 3.9%. With the CPI coming in hotter than expected, it increases the likelihood that the Fed will need to keep interest rates elevated for a bit longer, and this will probably weigh on stock prices in the near term.
On Thursday, the Census Bureau will release its Retail Sales report for last month. The consensus there is looking for a decline of 0.2%, versus a 0.6% increase logged in December. We’ll also get the latest figures on initial jobless claims from the Department of Labor. Estimates are calling for new positions to total about 217,000, down 1,000 from the prior month. Lastly, on Friday, the U.S. Producer Price Index (PPI) for January will come out. The PPI, which measures the change in the price of goods sold by manufacturers, is widely expected to show an uptick of 0.1%, versus the 0.1% decline posted in December.
Summing up Monday’s moves for the major indexes, the Dow Jones Industrials gained 125 points, or 0.3%, the S&P 500 lost four points (0.1%), and the tech-laden NASDAQ retreated 48 points (0.3%). – Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
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