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9/15/22 Producer Prices Fall, Support Holds

News:

The latest PPI data, which dropped yesterday morning, showed a decline in prices.

Photo of people working in a production line
Photo by Remy Gieling on Unsplash

The Producer Price Index (PPI) is thought to lead the CPI in some regards since often producers are passing along the higher (or lower) costs to consumers.

  • Prices fell 0.1% month over month
  • Prices are still up 8.7% year over year

Markets took the number in stride.

All four indexes ended with modest gains…

  • Dow Jones +0.1%
  • Nasdaq +0.7%
  • S&P 500 +0.3%
  • Russell 2000 +0.4%

Beneath the surface, the market appears a bit more divided.

49% of all stocks advanced, while 46% declined.

Sector Round-Up

6 of 11 sectors finished the day higher.

At the top…

  • Energy (XLE) +2.8%
  • Consumer Discretionary (XLY) +1.3%

At the bottom…

  • Real Estate (XLRE) -1.2%
  • Materials (XLB) -1.2%
Photo of steel rolls
Image from Nucor

One notable decline was in steel producer Nucor (NUE), which dropped 11% after providing weak Q3 guidance.

Your take-home:

  • The steel market is flooded as supply is outpacing demand.
  • The company did note that it expected 2022 to be its most profitable year ever.

Technicals:

The S&P 500 held support … for now

SPY chart with rising support marked
SPY Daily Candles – Chart via thinkorswim

We are watching the rising support level closely.

If buyers are going to have a strong showing this year, we’d like to see this level hold.

Our top indicators are beginning to look bullish … But should be taken with a grain of salt…

Timing:

No big market moving news is expected today.

But today is an important anniversary…

On this day in 2008, Lehman Brothers declared bankruptcy.

  • Prior to that, it was the world’s 4th largest investment bank 
  • Founded in 1850, the company survived for 172 years before falling 
  • It was exposure to subprime mortgages that did it in.

Lehman’s collapse left over 25,000 people unemployed and was the largest bankruptcy in U.S. history.

One lesson for today: 2022 is not 2008.

Watchlist:

^Open Position

IMRA support at $2, resistance at $2.40
EPM support at $8
MNTK support at $19
DCPH support at $18
RYTM support at $27
CRBU support at $12
RVNC resistance at $29
SGML support at $25
SEEL support at $1.35
^GEO support at $8
ARDX support at $1.40
PGEN support at $2.60
TCRT on watch
PL support at $7
^GERN support at $2.80

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