Jobless Claims, Producer Prices

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Thursday, Sept. 12. The Bottom Line segment of today’s podcast starts at (4:03) and Stocks on the Contrarian Radar©️ at (6:22) for listeners who want to skip ahead.

State of Play

Stocks rallied yesterday, with tech leading the charge. Been a little while since we’ve been able to say that. Nasdaq added more than 2% on the day after being down as much as 1% earlier in the session. As we eye our board of indicators for signs of direction at 0645, it looks like the risk-on mood is poised to continue:

• Stock index futures are pointing to a higher open, led by small caps. The Russell 2000 is up 0.4%. S&P 500 and Nasdaq right behind it;

• Commodities continue to gain ground, with our friend Dr. Copper up 1.8%. WTI crude oil is up 1.6% to trade around $68.50/barrel;

• Cryptos also moving higher. Bitcoin is up 2% to trade around $58,000;

• Bonds are consolidating a bit and the yield curve is dangerously close to re-inverting. The 2-year yield is up 3 basis points to 3.67% whilst the 10-year is up 3bps to 3.68% (yields move inversely to prices).

Today’s Known Events

Initial jobless claims are out at 0830. Economists who were surveyed expect 227,000 new claims, identical to last week and slightly below the four-week average of 230,000.

We also get the Producer Price Index at 0830. The expectation here is for an increase of 0.1% month-over-month for headline PPI, which would drop annualized PPI to 1.7% from 2.2%.

Core PPI, which excludes food and energy, is expected to print at 0.2% MoM after coming in unchanged last month. That would push annualized Core PPI up to 2.5% from 2.4%.

A couple of earnings to tell you about:

• Signet Jewelers (SIG 0.00%↑) and Kroger (KR 0.00%↑) are due intermittently;

• Adobe (ADBE 0.00%↑) reports after the close at 1600.