‘Harvey’ Shows Up in the Economic Data
Rising shares of Boeing (BA) pulled the Dow Jones Industrial Average up to a record high on Thursday, while the S&P 500 fell as investors saw higher-than-expected inflation increasing the chances of an interest rate hike.
The Dow’s third consecutive all-time high was driven in part by Boeing (BA) which rose 1.36 percent after Deutsche Bank raised its price target on the aerospace and defense stock.
The S&P 500 and Nasdaq moved lower after a Labor Department report showed consumer prices rose more than expected in August, boosting the odds of another interest rate hike this year.
The consumer price index’s (CPI) 0.4% gain last month was its biggest in seven months and is the last major economic data to be released ahead of the Federal Reserve’s Sept. 19-20 policy meeting. We don’t think the market was expecting that kind of a strength in terms of inflation.
After the data, the odds of a hike in December rose above 50% for the first time since July, from 41.3%.
Daily Summary: The Dow Jones rose 0.2%, while the S&P 500 lost 0.11%. The Nasdaq dropped 0.48%, hurt by a 0.86% decline in apple (AAPL).
About 6.0 billion shares changed hands on U.S. exchanges, above the 5.8 billion 20-day average.
Friday: The ill effects of Hurricane Harvey could show up in industrial production and in consumer data Friday. Industrial production, reported at 8:30 a.m. ET, is expected to take a hit due to the shutdown of refineries in Harvey’s path along the Gulf Coast. Economists expect to see a gain of 0.1 percent, compared to 0.2 percent in July, and the number could be weak in September with the added impact of Hurricane Irma.
More than 25% of U.S. refining capacity was affected by Harvey, and some production remains offline this week.
Consumer sentiment, reported at 10 a.m., also may see some storm impact. The consensus is 95, and it came in at 96.8 last month.
Hot Stocks: EFX, ORCL
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|Tuesday||6:00||NFIB Small Business Optimism Index||104.8||Medium|
|Thursday||8:30||Consumer Price Index||0.4 %||High|
|Thursday||8:30||Jobless Claims||300 K||Medium|
|Friday||8:30||Retail Sales||0.1 %||Medium|
|Friday||8:30||Empire State Mfg Survey||19.0||Medium|
|Friday||9:15||Industrial Production||0.1 %||Medium|
|Friday||10:00||Business Inventories||0.2 %||Medium|
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