Stocks Little Change On Interest Rate Uncertainty
2:50 pm Friday, December 09th, 2022
The stock market opened to modest weakness as investors digested the hotter-than-expected Producer Price Index (PPI) for November, yet things are shaping up to be more mixed with both sellers and buyers lacking conviction to this point in the session. The main indices are floating around their flat lines, confined to narrow trading ranges.
The PPI report has kept the market on edge ahead of next week’s Consumer Price Index and FOMC meeting, the latter of which will also include an updated Summary of Economic Projections that will provide some insight on terminal rate projections.
On a month-over-month basis, the PPI and core-PPI readings were higher than expectations, but the year-over-year readings (7.4% for total PPI and 6.2% for core PPI) were down from 8.1% and 6.8%, respectively, in October.
The Treasury market had a more pronounced reaction than the stock market. The 2-yr note yield, at 4.26% before the release, sits at 4.33% now. The 10-yr note yield, at 3.47% before the release, sits at 3.55% now.
S&P 500 sector performance reflects mixed stock market action. Roughly half of the 11 sectors trade down with energy (1.7%) showing the steepest loss amid falling oil prices ($70.91/bbl, -0.58, -0.8%). Meanwhile, the outperformers are led by communication services (+1.0%), which is bolstered by an outsized gain in Netflix (NLFX). The company trades up after receiving an upgrade to Overweight from Equal Weight at Wells Fargo.
There hasn’t been much movement at the index level, as most of today’s outsized moves have been reserved for individual stocks like lululemon (LULU) and DocuSign (DOCU), which are reacting in different ways to their latest earnings reports and outlooks.
