00:00 Speaker A
Ellie, let's start with you on this PPI data because I know you were watching those components of CPI yesterday quite closely. What story was PPI telling us?
00:11 Ellie
Well, PPI coming in softer than expected for the month of June. We did see the May numbers revised higher. All things considered though, you were just talking about consumer prices. This is going to keep the Fed on pause for now. And if you take a look at CME futures, markets are discounting the odds of a September rate cut. We are now firmly below 60%. We had been above that level pretty consistently here. So overall, there just seems to be less conviction that we will be seeing those rate cuts. That being said, considering we have PPI data softer than expected, that's helping lift futures trading this morning. We also saw long-term treasury yields, like the 10-year yield and the 30-year yield, edge a bit lower, but they're still pretty elevated. And that came after that inflation report yesterday. So we have the 10-year yield hovering around that 4.5% level. The 30-year yield is again hovering around that 5% level. And these are levels that tend to pressure equities. So something to just keep an eye on here as we continue to see this data. Economists have largely said that we're not going to see the full impact of tariffs until later this summer, possibly into the fall, especially since the goalpost keeps moving when it comes to when we could potentially see these retaliatory tariffs go into effect.
02:23 Speaker A
Um, and Brooke, you know, maybe the 4 and a half percent level for the 10 year is problematic for stocks, but we have not seen the inflation data really weigh on stocks thus far.
03:00 Brooke
Absolutely. Well, we're seeing so far is really markets seem to be shrugging off all this latest data that we're getting. They shrugged off the CPI report. They seem to be shrugging off the fact that the producer price index came in largely unchanged or flat, year-over-year this morning. And also in addition to that, what we saw back in June is these large fluctuations as trade deals were announced, as we got more iteration, especially in May and June about how exactly the US and China, that 30% down from 145%. We got news from Vietnam, we saw large swings there, but what we've seen so far this week is sort of a tempered approach by investors as they really understand and really, you know, position themselves in this environment where they realize that these announcements are coming rapidly, they're coming frequently, and they're changing also rapidly as well. And so, markets seem to be shrugging off not only this latest economic data that we're getting, but also the announcement with the US trade deal with Indonesia on Tuesday. And now, you know, in addition to that, these big bank earnings largely not really moving overall futures higher this morning.
