Rover’s Weekly Market Brief — 9/15/2017

Economy

August’s Produce Price Index ^[6] (PPI) measure of wholesale inflation rose +0.2%, with a +0.5% increase in final demand goods balancing out by a +0.1% increase in final demand services. Three quarters of the goods increase was due to a +9.5% spike in the price of gasoline, which contributed to an overall +3.3% increase in energy prices. Goods prices were held back by drops in prices for plastic resins and materials (-0.9%) and food prices (-1.0%). On an annual basis, wholesale inflation was up +2.4%, and excluding energy, foods and services, was up +1.9%.

The Consumer Price Index ^[7] (CPI) in August rose by +0.4%, and was up +1.9% over the previous 12 months. The report included a disclaimer that Hurricane Harvey was late enough in the month that its influence was minimal, but, as with the PPI index, higher energy costs (+2.8%), driven by a spike in the price of gasoline (+6.3%), accounted for much of the CPI increase. There were additional CPI contributions from shelter (+0.5%), including a +0.4% increase in rent, and food away from home (+0.3%). Prices dropped for food at home (-0.2%), energy services (-0.1%), used cars (-0.2%), and medical care commodities (-0.1%). Excluding food and energy, CPI was up +0.2% M/M, and +1.7% Y/Y.

Retail sales ^[8] dropped -0.2% in August for their largest decline in 6 months, and previous months were revised downwards with June dropping from +0.3% to -0.06% and July dropping from +0.6% to +0.3%. Sales fell for automobiles (-1.6%), clothing (-1.0%), electronics (-0.7%), and building materials (-0.5%). Non-store (i.e. online) retailer sales also dropped by -1.1%, but Amazon’s annual Prime Day helped push July’s non-store sales to +1.8% and may have shifted purchases to July from August. Sales at gas stations (+2.5%) were aided by rising prices, and were also up for furniture (+0.4%), food (+0.3%), and the “miscellaneous stores” (+1.4%) category, which includes florists, office supplies and used merchandise stores. On a yearly basis sales were up +3.2%, with yearly sales excluding automobiles up +3.6%.

Upcoming Economic Reports:

Wednesday September 20 – Federal Open Market Committee (FOMC) Announcement

Friday September 22 – Purchasing Managers Index (PMI) Composite Flash

Earnings Calendar:

 

Monday	Tuesday	Wednesday	Thursday	Friday
Mitsubishi Chemical Hldgs (MTLHY) [9]	China Railway (CWYCY) [10]	General Mills (GIS) [11]	Manchester United (MANU) [12]	CarMax (KMX) [13]
China Oilfield Services (CHOLY) [14]	AutoZone (AZO) [15]	Telia Company (TLSNY) [16]	Presidio (PSDO) [17]	Finish Line (FINL) [18]