PPI Springboard
S&P 500 is consolidating before PPI, having seen its upswing attempt rejected, corporate bonds stalled, and fear of inflation data culminating with CPI tomorrow, is there. Yet, there are several premarket hints – Russell 2000 rising as yields retreat a little, and also copper not being shy about extending sharp gains. Crude oil is of course subdued, and would be so – both precious metals keeping relatively up, positioning for the PPI outcome that I described on Sunday as most likely.
S&P 500 and Nasdaq
(Click on image to enlarge)
S&P 500 next upleg is approaching, and PPI coming in as low as possible would allow the Fed to play the rate cuts card once again. 5,235 is support, and given the beaten down cyclicals already, it would be hard to break unless we get a full-fledged risk-off day. That would require PPI above 0.5% rather than merely 0.4%, which I don‘t think we would get. I favor 0.3% if not 0.2% through some statistical miracle.
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