The lower CPI reading sparked an enormous equity rally, most notably in beaten up technology names that had seen their share prices drop 90% or more from the peak. Some of the formerly loved growth stocks were up 40-60% in 3 days.
Producer prices would confirm the consumer price drop with a flat reading versus the prior month.
This reading is for final demand, but intermediate stages have declining prices which normally make their way into the final reading with a lag. Raw industrial prices were down 20% over a six-month period through October. Going back to 1980, this index only saw a larger six-month drop during the 2008 financial crisis.
The initial reading on the Atlanta Fed GDP Now for the current quarter is 4.4%, but data for the week was mostly disappointing.
- Retail sales came in much better than expected but changing holiday shopping and shifting Amazon Prime days make comparisons difficult.
- Walmart beat earnings and its stock popped, but Target fell well short.
- The National Association of Home Builders Market Index continues to fall sharply.
- The Empire Manufacturing six-month forward new order outlook dropped to a lower level than anytime in series history (2001).