Stocks Rally, PPI Misses

Market Snapshot

Asset	Level	Change
S&P 500	6,967.38	+1.18%
Nasdaq 100	25,842.00	+1.81%
Dow Jones	48,535.99	+0.66%
Russell 2000	2,705.67	+1.32%
USD/JPY	158.97	-0.15%
EUR/USD	1.18	+0.09%
GBP/USD	1.35	+0.24%
Gold	4,823.20	-0.04%
WTI Crude	92.96	+1.84%
Bitcoin	73,907.63	-0.37%
US 2Y Treasury	3.78%	-0.79%
US 10Y Treasury	4.30%	-0.23%

Prior Economic Events

Data	Prior	Cons	Actual
Existing Home Sales	4.1m	4.1m	4.0m
Existing Home Sales Month-over-Month	2.70	-	-3.60
Speech by Fed's Miran	-	-	-
ADP Employment Change Weekly	26,000	-	39,000
Producer Price Index Month-over-Month	0.50	1.10	0.50
Core Producer Price Index Month-over-Month	0.30	0.50	0.10
Fed Goolsbee Speech	-	-	-
Speech by Fed's Barr	-	-	-
Speech by Fed's Collins	-	-	-
API Weekly Crude Oil Stocks	3.7m	-1.3m	6.1m

Today's Economic Events

Data	Prior	Cons	Time
Export Prices Month-over-Month	1.50	1.50	04:30
Import Prices Month-over-Month	1.30	2	04:30
NY Empire State Manufacturing Index	-0.20	-0.50	04:30
Speech by Fed's Barr	-	-	04:30
NAHB Housing Market Index	38	37	06:00
EIA Weekly Crude Oil Inventory	3.1m	-	06:30
EIA Weekly Gasoline Inventory	-1.6m	-	06:30
Speech by Fed's Bowman	-	-	09:45
Net Long-term TIC Flows	15,500m	36,600m	12:00

US equities surged amid tech gains, with S&P 500 up 1.18% despite mixed economic data.
Producer prices rose less than expected, signaling easing inflation pressures.
Housing sales disappointed, while oil inventories built unexpectedly.

Yesterday's Recap

US existing home sales fell short of expectations, printing at 3.98 million units annually against a consensus of 4.06 million, with a month-over-month decline of -3.6% versus a prior 2.7% gain, highlighting ongoing weakness in the housing sector amid high mortgage rates. Producer Price Index (PPI) month-over-month came in at 0.5%, matching prior but missing the 1.1% consensus, while core PPI slowed to 0.1% against 0.5% expected, suggesting moderating input costs for businesses. ADP weekly employment change rose to 39,000 from 26,000 prior, indicating some labor market resilience despite no consensus forecast.

API crude oil stocks built by 6.1 million barrels, exceeding the expected drawdown of -1.3 million, pressuring oil prices even as WTI rose 1.84% to $92.96. Equity markets advanced broadly, with S&P 500 closing at 6,967.38 up 1.18%, Nasdaq 100 at 25,842.00 up 1.81%, Dow Jones at 48,535.99 up 0.66%, and Russell 2000 at 2,705.67 up 1.32%, driven by risk-on sentiment. Treasury yields dipped slightly, with 2-year at 3.78% down 0.79% and 10-year at 4.30% down 0.23%, while USD/JPY eased 0.15% to 158.97.

Fed speakers including Goolsbee, Barr, and Collins provided commentary, but no major policy shifts emerged.

The Day Ahead

Today's US calendar features export prices month-over-month at 4:30 ET, with consensus at 1.5% following a prior 1.5%, potentially influencing trade balance outlooks. Import prices month-over-month are due at the same time, expected at 2% after 1.3% prior, offering insights into imported inflation dynamics. NY Empire State Manufacturing Index releases at 4:30 ET, forecasted at -0.5 versus prior -0.2, which could signal regional factory activity trends amid broader manufacturing concerns.

Fed's Barr is scheduled to speak again at 4:30 ET, providing possible forward guidance on monetary policy. NAHB Housing Market Index is set for 6:00 ET, with consensus at 37 after 38 prior, gauging builder sentiment. Markets will watch these for clues on economic momentum, especially with no actual data yet reported.

Attention may also turn to any spillover from global events, though focus remains on domestic indicators.

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Other Economic Notes

Broader US economic themes include persistent housing market softness, as evidenced by the recent existing home sales miss, compounded by MBA 30-year mortgage rates holding at elevated levels around 6.51%. Labor market strength persists with ADP gains, but unemployment stands at 4.30% as of March, supporting consumer spending yet raising questions on wage pressures. Inflation trends show cooling, with CPI year-over-year at 2.31% as of April 2025, aligning with the PPI slowdown and potentially easing the path for policy normalization.

Global Macro News

Global macro developments are influencing US markets, with oil prices climbing despite inventory builds amid reports of Iran demanding compensation from Arab states over alleged strikes, heightening Middle East tensions that could disrupt energy supplies. Investors are eyeing a possible path to peace between the US and Iran, with proposals for suspending nuclear activity, which contributed to stocks approaching highs as risk premiums eased. In Europe, the IMF warns of economic pain for the UK from the Iran conflict, potentially affecting global growth and US export demand.

China's agribusiness tariff updates and India's policies may impact US agricultural exports, adding to trade uncertainties. Airline merger talks between United and American raise competition fears, possibly affecting US transport sectors and broader equity sentiment. IMF data on record Canadian dollar reserve sell-offs signals currency volatility that could strengthen the USD.

Argentina's weak reserves ahead of IMF talks highlight emerging market risks, while Morocco's industrial expansion offers minor positive offsets for global supply chains.

Fed Watch

Recent Federal Reserve communications emphasize a data-dependent approach, with the effective fed funds rate holding at 3.64% as of April 13, reflecting steady policy amid mixed signals. Speeches by Fed officials like Goolsbee, Barr, and Collins yesterday focused on monitoring inflation and growth, with no explicit shifts in forward guidance, though they reiterated commitment to the 2% inflation target given CPI at 2.31% year-over-year. Treasury Secretary Bessent urged the Fed to maintain rates amid the Iran conflict, advocating a 'wait and see' stance before any cuts, aligning with market pricing that has adjusted expectations downward.

The dot plot from prior FOMC meetings projects gradual easing, but hotter data could delay this, as seen in recent quantitative tightening discussions that aim to normalize the balance sheet without disrupting markets. These elements suggest the Fed is cautious on rate cuts, supporting higher-for-longer yields and bolstering the USD against crosses like EUR/USD at 1.18 and GBP/USD at 1.35. Overall, Fed statements point to balanced risks, with implications for equities if geopolitical tensions subside.

US Macro Daily(Beta Mode)