Producer Price Index
This morning, the Labor Department reported the seriously overdue results
for the Producer Price Index for January. Labor reported a 0.6% increase,
which includes food and energy, since everyone I know eats and heats. This
figure incorporates new seasonal-adjustment factors, plus a major overhaul in
methodology. It is the latter that was blamed for the delay in the release of
these data. (The February PPI was due out last Friday.)
The new numbers need more perusal, but here's a quick glance at the
new/old monthly numbers for January and the prior six months.
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PRODUCER PRICE INDEX*
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Month/ New Old
Year Series Series
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02/04 <- Delayed ->
01/04 +0.6% NA
12/03 +0.2% +0.3%
11/03 -0.2% -0.3%
10/03 +0.7% +0.8%
09/03 +0.2% +0.3%
08/03 +0.5% +0.4%
07/03 +0.1% +0.1%
----------------------
*Finished goods,
seasonally adjusted
----------------------
Stocks
On Tuesday, after the conclusion of the Federal Open Market Committee
meeting, the stock market took comfort in the somewhat more pessimistic language
about employment growth contained in the FOMC's post-meeting statement.
(If this sounds a little perverse, it is. But as I opined recently, many
on Wall Street now quietly champion sluggish employment growth as the vehicle
that will keep Greenspan in check on interest rates -- oink, oink!)
The stock rally carried through in yesterday's trading, but the upswing
in prices still left my tracking group well short of recent highs.
As of yesterday's close, the group stood an average 1.9% above recent
respective closing lows, all but one of which were established on Monday. (The
exception was the Russell 2000, which finished slightly lower on Tuesday.)
Nevertheless, through yesterday, the group remained an average 4.0% below recent
closing highs (median decline of 3.4%). Declines ran in range of 2.9% for the
S&P 500 and Wilshire 5000, to 8.0% for the NASDAQ 100.
So, it looks like the boys and girls in Chicago dodged a possible bullet
regarding tomorrow's expiration of options and futures. Longer run, however,
the topping formations are very much intact. Stocks are not out of the woods
yet!
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