Stock Market Update

The S&P 500 futures are up 20 points and are trading 0.3% above fair value, the Nasdaq 100 futures are up 100 points and are trading 0.5% above fair value, and the Dow Jones Industrial Average futures are up 136 points and are trading 0.3% above fair value.

The Producer Price Index for final demand increased 0.2% month-over-month in December (Briefing.com consensus 0.3%), leaving it up 3.3% year-over-year versus 3.0% in November. Excluding food and energy, the index for final demand was unchanged month-over-month (Briefing.com consensus 0.2%), leaving it up 3.5% year-over-year versus 3.5% in November.

The key takeaway from the report is that the better-than-expected monthly readings have been clouded by the less inspiring year-over-year readings, as well as the understanding that inflation at the wholesale level moved in the wrong direction in 2024 (versus 2023) and remains elevated relative to the Fed's 2% inflation target.

Treasuries had a choppy response, but are little changed from levels in front of the report now. The 10-yr yield is down one basis points to 4.79% and the 2-yr yield is down two basis points to 4.38%.