Friends

It’s like Groundhog’s Day. Oil prices rise, bond yields rise, and stocks go down. This morning’s PPI number came in about as expected, but market participants are focused on oil prices and the pass-through effects that higher prices have on inflation and the economy in general. In addition, we have been watching bonds closely and the yield on the 10-year Treasury Note has almost made it to 5%. These are headwinds that the bulls just can’t overcome at the moment.

For the day, the Dow Jones Industrial Average was down 316 points to close at 52,064. The S&P 500 was down 44 points to close at 7,591. The Nasdaq Composite Index was down 171 points to close at 26,081. Gold was down $92 to trade at $4,368 per ounce, while oil was up $6.69 to trade 102.74 per barrel WTI.

Remember, we get a look at the Consumer Price Index tomorrow, but if oil prices don’t stop going up all bets are off. These economic data points are looking in the rear-view mirror, while looking out the windshield of the car all we see is trouble ahead in the form of higher energy prices. Let’s see how the week finishes out tomorrow.

Have a nice evening everyone

Jim