- US equities initially embraced a miss in US PPI figures, but downside factors weigh.
- Large bank earnings broadly missed the mark on Friday, plaguing US equities.
- Next Wednesday’s US Retail Sales to be the linchpin in sentiment next week.
US equity markets rallied in early NY trading hours on Friday after the US Producer Price Index (PPI) declined faster than market models predicted as producer-level inflation continues to ease, even after Thursday’s US Consumer Price Index (CPI) showed consumer inflation accelerated unexpectedly in December.
US annual PPI inflation rises to 1% in December vs. 1.3% expected
The US PPI print came in broadly below forecasts, with the MoM PPI for December declining -0.1%, in-line with the previous month’s -0.1% decline (revised down from 0.0%), missing the median market forecast of a 0.1% rebound.
Core PPI figures in December also missed expectations also missed the mark, printing a flat 0.0% to match the previous month while markets were anticipating a 0.2% step up.
The good mood in US equities saw limited impact as traders pulled back heading into the closing bell, with investors gearing up for next Wednesday’s US Retail Sales print, where markets are hoping for a step up to 0.4% MoM in December compared to November’s 0.3%.
Large bank earnings reports disappointed on Friday, further hampering sentiment despite an overall decline in Treasury yields on the day, with major indexes getting dragged down by banks reporting less-than-stellar earnings reports. Inflation continues to take the priority spot for investors, as money markets hope that Thursday’s CPI uptick was merely a one-off with traders pricing in up to 160 basis points in rate cuts from the Federal Reserve by the end of 2024, compared to 154 bps from earlier this week. Airlines also disappointed investors, adding to index woes as travel growth continues to struggle.
The Standard & Poor’s 500 and NASDAQ Composite both posted slight gains of 0.8% and 0.3% respectively, with the S&P 500 climbing 3.59 points to end Friday at $4,783.83 while the NASDAQ rose 2.57 points, ending the trading week at $14,972.76.
The Russell 2000 index fell -0.23% to close at $1,950.96, while the Dow Jones Industrial Average (DJIA) fell nearly 120 points, closing down around three-tenths of a percent to wrap up the trading week at $37,592.98.
DJIA Technical Outlook
The DJIA remains trapped in near-term consolidation, trading into familiar levels that have plagued the major equity index since climbing to record highs in December. A hard ceiling has been priced into intraday charts from $37,800.00 as intraday price action trades back into the 200-hour Simple Moving Average (SMA) just above $37,500.00.
The DJIA’s rise on daily candlesticks has the equity index trading well above the 200-day SMA near $34,500. The 50-day SMA is climbing through the $36,000 major handle, and could chalk in a technical floor to fend off any bearish downturns.
DJIA Hourly Chart![](https://editorial.fxstreet.com/miscelaneous/DJIAH-638406951045082994.png)
DJIA Daily Chart![](https://editorial.fxstreet.com/miscelaneous/DJIA-638406950459146676.png)
DJIA Technical Levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD sticks to half-yearly highs of 0.6740 ahead of US NFP
![AUD/USD sticks to half-yearly highs of 0.6740 ahead of US NFP](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/AUDUSD/macro-of-aussie-100-note-8615104_XtraSmall.jpg)
AUD/USD consolidates near a multi-month peak at 0.6740 in the Asian session on Friday as traders keenly await the the US NFP report. The Fed-RBA policy divergence continues to underpin the pair.
USD/JPY falls hard toward 160.50, US NFP data awaited
![USD/JPY falls hard toward 160.50, US NFP data awaited](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/USDJPY/five-thousand-japanese-yen-notes-on-many-dollars-background-30615054_XtraSmall.jpg)
USD/JPY is falling hard toward 160.50 in Asian trading on Friday, having reversed from near 161.40. The pair drops on renewed US Dollar weakness and Japanese verbal intervention, which rescues the Yen. The focus shifts to US jobs report.
Gold price steadily climbs back closer to two-week high, focus remains glued to US NFP
![Gold price steadily climbs back closer to two-week high, focus remains glued to US NFP](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/stacked-gold-bars-13094022_XtraSmall.jpg)
Gold price extends its consolidative price move during the Asian session on Friday and remains well within the striking distance of the highest level since June 21 touched earlier this week. The recent softer US macro data reaffirmed market bets that the Federal Reserve will begin cutting rates in September.
Is the party over for meme coins?
![Is the party over for meme coins?](https://editorial.fxstreet.com/images/Resources/CryptoWorldSEO_XtraSmall.png)
According to Santiment's data on Thursday, meme coins have experienced steep declines in the past few weeks, following speculation that the crypto market has passed its euphoria phase.
US jobs report preview – Will Nonfarm Payrolls disappoint?
![US jobs report preview – Will Nonfarm Payrolls disappoint?](https://editorial.fxstreet.com/images/Macroeconomics/EconomicIndicator/Employment/NFP/two-businesspeople-shaking-hands-gm470252334-62070868_XtraSmall.jpg)
Will the July Nonfarm Payrolls report disappoint, sending stocks and the US Dollar lower? Let's take a look at what the signal is from the other labor market indicators because forex fundamentals matter for trading.