The Producer Price Index rose 0.8% in January, above an expected increase of 0.3%. The core rate, which removes food and energy, increased 0.4%, well above the estimate of a 0.1% rise. Year-over-year, the headline rate is down 1.0%, and the core rate edged down from 4.3% y/y to 4.2%. Energy costs rose 3.7% in January, reversing a decline of 9.1% in December, and account for most of the change in direction of expected prices paid, as the headline rate fell 1.9% in December.
The Philly Fed’s Business Activity Index tumbled in February—after posting two consecutive months of improvement—from -24.3 in January to -41.3, the lowest reading since 1990 and well below the consensus of -25.0. New orders and employment worsened. Prices received fell from -26.2 to -27.8 but prices paid improved from -27.0 to -13.7.
The Leading Index rose 0.4% in January, larger than the 0.1% increase that economists expected, and December was revised lower to 0.2%. The increase in the money supply (M2), driven by the Fed’s credit easing policy, contributed 0.54% to the 0.4% number.
The Dow Jones Industrial Average fell 90 points (1.2%) to close at 7,466, the S&P 500 Index fell 9 points (1.2%) to 779, and the Nasdaq Composite declined 25 points (1.7%) to 1,443. Crude oil rose $2.77 to $40.18 per barrel, and gold fell $11.10 to $973.80 per ounce.
Magnificent Seven Update
Daily Update Of Open Positions...Stocks & ETFs
