Stock Market Update

The S&P 500 futures are flat and are trading in-line with fair value, the Nasdaq 100 futures are down 20 points and are trading 0.1% below fair value, and the Dow Jones Industrial Average futures are up 96 points and are trading 0.2% above fair value.

The Producer Price Index for final demand increased 0.2% month-over-month in October (Briefing.com consensus 0.2%) following an upwardly revised 0.1% increase (from 0.0%) in September. Excluding food and energy, the index for final demand jumped 0.3% month-over-month (Briefing.com consensus 0.3%) after increasing 0.2% in September.

With these monthly increases, the index for final demand was up 2.4% year-over-year, versus 1.9% in September, and the index for final demand, less food and energy, was up 3.1% year-over-year, versus 3.0% in September.

The key takeaway from the report is that there was inflation in this report -- not disinflation -- at the wholesale level. That will stir concerns about PCE inflation sticking at higher levels and the Fed not cutting rates as much as previously envisioned.

Initial jobless claims decreased by 4,000 for the week ending November 9 to 217,000 (Briefing.com consensus 220,000). Continuing jobless claims for the week ending November 2 decreased by 11,000 to 1.873 million.

The key takeaway from the report is rooted in the low level of initial jobless claims -- a leading indicator -- which suggests employers are feeling reasonably good about the economic outlook, as they appear reluctant to layoff employees.