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Markets Rebound On Cool Inflation Data, Experts Await Wednesday's Consumer Price Report

Benzinga ·  Jan 14 15:52

December's Producer Price Index data came in cooler-than-expected Tuesday, rising 3.3% year-over-year, below forecasts of a 3.4% increase. Markets are reacting positively, but experts have mixed views on the latest inflation data.

Expert Ideas: Charlie Ripley, senior investment strategist for Allianz Investment Management, said that the cooler-than-expected PPI data is "encouraging" ahead of Wednesday's Consumer Price Index print. He noted that the weakness in prices was broad , with the exception of a notable rise in gasoline prices and some strength in airfares.

Ripley also noted that the reaction in the bond market was muted, but said "we are expecting a wider range of outcomes following tomorrow's release on the latest consumer price data."

Wharton professor and economist Mohamed A. El-Erian also pointed to slightly lower Treasury yields following December's PPI print as the markets await Wednesday's CPI data release.

Both US headline and core PPI inflation for December just came in below the consensus forecasts, leading to some relief in yields, albeit timid as markets wait for tomorrow's CPI data.#economy #inflation

— Mohamed A. El-Erian (@elerianm) January 14, 2025

Economist and global strategist Peter Schiff acknowledged December's cool PPI data but highlighted rising commodity prices in a social media post.

Markets are relieved that YoY December producer prices only rose by 3.3%. But in the real world commodity prices are soaring. Here are some of the big YoY gains: cocoa 170%, coffee 75%, natural gas 50%, wheat 45%, sugar 40%, oil 35%, soybeans & copper 30%, and silver & gold 25%.

— Peter Schiff (@PeterSchiff) January 14, 2025

Markets React: All major U.S. indices are trading higher Tuesday with the SPDR S&P 500 ETF Trust (NYSE:SPY), tracking the S&P 500, 0.44% higher at $583.92 and the Invesco QQQ Trust (NASDAQ:QQQ), tracking the Nasdaq 100 index, 0.63% higher at $508.75 at the time of publication.

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