Stocks had a strong performance on Tuesday following the release of the latest U.S. wholesale inflation report. However, Evercore ISI said investors should still exercise caution. The Wall Street research firm warned on Tuesday that monthly producer price index readings have little correlation with the broader consumer price index, which may have a greater impact on the stock market. The producer price index (PPI) rose 0.1% in July, lower than economists’ expectations. In other words, just because PPI rose less than expected, that doesn’t mean investors should expect Wednesday’s CPI report to be dovish. Stephen Stanley of Santander US echoed the sentiment. “Financial markets appear to be overreacting to the producer price index (PPI) every month,” said Stanley, the bank’s chief economist. [It] The impact on CPI is limited, [which] ” That said, if July consumer price index (CPI) data released on Wednesday adds credibility to expectations that the Federal Reserve will cut interest rates next month, it could give stocks another boost. The S&P 500 closed up nearly 2% on Tuesday, the Nasdaq rose 2.4%, and the major indexes rose more than 408 points, or 1.04%, well above their August 5 lows, when the Dow Jones Industrial Average and S&P 500 indexes are all at all-time highs. David Russell, head of market strategy, said on Tuesday that after a weak July non-farm payrolls report triggered a sell-off in global markets earlier last week, “the data was not bad enough to impact earnings. … We are still looking for double digits.” profit growth.
