[Platinum Insights] (8.11.23)

Good morning.  

U.S. stock index futures were subdued on Friday, with investors cautious ahead of the producer prices inflation data due later in the day. 

U.S. Labor Department’s producer price index (PPI) for final demand, is expected to rise 0.2% in July, after growing 0.1% in June. In the 12 months through July, the PPI likely climbed 0.7%, after rising 0.1% on the same basis in June. 

The tech-heavy Nasdaq and the S&P 500 are on track to end their second week lower as a jump in U.S. bond yields weighed on rate-sensitive megacap growth and technology stocks that have led outsized gains this year. The yield on the benchmark U.S. 10-year Treasury note rose to 4.08%, pressuring growth stocks such as Nvidia ( NVDA ) and Tesla in premarket trading. 

San Francisco Fed President Mary Daly acknowledged in an interview on Thursday that recent inflation data had been moving in the right direction. However, Daly added that the central bank still has “more work to do.” 

WTI crude futures rose to $83 per barrel. Gold prices were below the $1,920 an ounce mark while the yield on the US 10-year Treasury note eased to the 4% mark.  

“Amid runaway government deficits and the Treasury increasing its debt issuance both in size and duration, the balance of power seems to be shifting in favor of higher yields,” said Marios Hadjikyriacos, senior investment analyst at forex broker XM. “Higher yields incentivize investors to park their cash in the safety of bonds, and therefore decreases demand for risky plays like equities.” 

The Producer Price Index for final demand increased 0.3 percent in July, seasonally adjusted, the  U.S. Bureau of Labor Statistics reported today. Final demand prices were unchanged in June and  declined 0.3 percent in May. (See table A.) On an unadjusted basis, the index for final demand  advanced 0.8 percent for the 12 months ended in July.

https://www.bls.gov/news.release/ppi.nr0.htm

Have a great weekend!