Producer Price Index Down -0.2%, Recovery In Question

Commenting on the Producer Price Index and today’s trading Gorilla Trades strategist Ken Berman said:

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Q2 2020 hedge fund letters, conferences and more

The major indices are mixed and flat at midday following a bearish overnight session and a pre-market bounce in risk assets. The most lockdown-sensitive issues got a boost thanks to another positive report regarding Gilead's (GILD) remdesivir drug that's one of the prime candidates for a COVID-19 treatment. The number of new COVID cases continues to break records globally and in the U.S., but stocks remain remarkably stable in the face of the scary headlines and the promise of an effective treatment was enough to reverse the overnight dip.

Qualivian Investment Partners Up 30% YTD; Long ORLY Thesis

Qualivian Investment PartnersQualivian Investment Partners commentary for the second quarter ended July 30, 2020. Q2 2020 hedge fund letters, conferences and more “Short-term investors will accept a 20% gain because they didn’t spend the time to develop the conviction and foresight to see the next 500%.” - Ian Cassell Executive Summary Readers of investment letters fall into Read More


The Producer Price Index Misses The Consensus Estimate

In economic news, the Producer Price Index (PPI) came in at -0.2%, well below the expected +0.4%, putting the speed of the recovery into question. The core PPI also missed the consensus estimate by a wide margin, but on a positive note, Italian and French industrial production surged higher by 42% and 20%. The two countries were among the hardest-hit in Europe, and the quick recovery in manufacturing could be especially important in the case of Italy’s fragile economy. Volatility remains low on Wall Street and trading activity is expected to remain light this afternoon, with all eyes on tropical storm Fay that will likely hit the East Coast this evening.

Market Wrap

Dow: 25,846, + 140 or 0.6%

S&P 500: 3,162, + 10 or 0.3%

Nasdaq: 10,539, - 9 or 0.1%

Russell 2000: 1,413, + 14 or 1.0%

Market breadth has been relatively strong this morning, thanks to the relatively strong small-caps, with advancing issues outnumbering decliners by a 7-to-3 ratio on the NYSE at midday. Only 9 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 58 stocks hit new 52-week highs. The major indices have been hovering around their daily VWAPs (Volume-Weighted Average Price) throughout the morning session, pointing to a mixed and choppy afternoon. Tech stocks have been showing relative weakness for the first time in over a week while cyclical issues and financial, in particular, have been outperforming the broader market, but the divergences haven’t been as pronounced as in recent days and the longer-term trends remain intact at the level of the key sectors. Stay tuned!