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U.S producer Price index unexpectedly rises

S&P 500 Drops and U.S. PPI Increases, Palantir Shares Fall Despite Strong Earnings & Spending in Retail Increases 1.3% in The UK

S&P 500 moves lower, as U.S. PPI increases

The benchmark S&P 500 fell for the first time in 7 sessions today, as data revealed that producer prices in the U.S. had risen.

Figures from the Labor Department showed that the producer price index rose 0.6% in October, after gaining 0.5%the month prior.

The rise in PPI was as expected, with many in the markets forecasting a 0.6% increase in figures for last month.

đź’ˇ What is the producer price index, and why is it important?
The Producer Price Index (PPI) program measures the average change over time in the selling prices received by domestic producers for their output. The prices included in the PPI are from the first commercial transaction for many products and some services.

Many believe that the PPI is the indicator that precedes the CPI, if the cost of manufacturing rises, the finished product will do so as well.

Overall, roughly 60% of last month’s increase in PPI was due to the prices of goods rising 1.2%, in addition to a 6.7% surge in gasoline prices.

Many attribute the rise in prices to come from bottlenecks in the supply chain, caused by the spread of the Delta Variant of COVID-19.

As of writing, the S&P 500 was trading 0.48% lower, with Gold prices climbing to $1,834, the highest since August.

Palantir shares fall despite strong earnings

As Q3 earnings season waged on, Tuesday saw markets react to Palantir’s call with investors, where it reported better than expected revenue growth for the quarter.

Despite reporting annual revenue growth of 36% to $392 million, shares in the company fell as the figures dropped from a 49% annualized increase, during Q1 and 2.

The company, founded by Peter Theil confirmed earnings of 4 cents per share, which came in as expected. In addition to revenue for the quarter of $392 million vs. $385 million expected.

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Palantir went on to forecast revenue for the fourth quarter, expecting this to come in at $418 million, which is currently higher than the $402 million many expect.

Shares in Palantir Technologies were down close to 9% as of writing.

UK retail sales increase, yet FTSE 100 declines

The FTSE 100 closed Tuesday’s session lower, despite data from the United Kingdom showing that retail sales were on the rise.

Data from the British Retail Consortium reported that spending rose by 1.3%, compared with the same period last year.

This growth in October comes after a slowdown in retail activity in September, which saw sales increase by only 0.6% for that month.

đź’ˇ First China now India?
India’s Government is set to pass a bill that would ban all cryptocurrencies. The nation’s finance authorities remain conservative on the matter

According to a bulletin posted on Lok Sabha, the Indian parliament’s official website, The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, aims to create a framework that would facilitate the creation of a central bank digital currency (CBDC).

And as we saw with China, the push against crypto does certainly put pressure on cryptos, but not enough to hinder future growth. In fact, prices were only negatively impacted in local Indian crypto exchanges

KPMG, who produce the data along with the Retail Consortium, stated that “The much-reported squeeze on household spending has yet to materialize as consumers seem happy to carry on shopping”.

London’s FTSE 100 fell 0.36% in the session.

“We want to perceive ourselves as winners, but successful traders are always focusing on their losses.”

– Peter Borish

Eliman Dambell

Senior Market Analyst

 

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