Michael M. Santiago
Major market averages were trading lower Friday morning after investors received more inflation data.
At the beginning and the Dow (DJI) was less than 0.2%the S&P 500 Index (SP500) was down 0.4%and the Nasdaq Composite (COMP.IND) was down 0.8%.
Looking towards the Treasury market and yields marched higher with the shorter-end 2-year US Treasury yield (US2Y) up 8 basis points to 4.65%. At the same time, the yield on longer-dated 10-year U.S. Treasury bonds (US10Y) rose 6 basis points to 4.30%.
See how other yields trade across the entire yield curve here.
Producer price index data rose more than expected in January. The PPI rose 0.3% in January, compared to the 0.1% increase expected.
“Like the CPI data, US #PPIinflation just came in stronger than expected. Month after month. PPI rose 0.3% in January (0.5% for core), above the consensus forecast of 0.1%, as the 0.6% increase in services offset the decline in 0.2% in assets,” said Mohamed A. El-Erian.
“Services continue to be a key driver of inflation at both the consumer and producer levels. The services PPI has been the biggest contributor to the PPI since last July,” said Kathy Jones, chief fixed income strategist at Charles Schwab.
Data on the start of new construction and building permits has also arrived. January construction starts were -14.8% M/M at 1,331 million versus the expected level of 1,470 million. Additionally, building permits came in -1.5% M/M at 1,470 million versus the consensus number of 1,510 million.
“Single-family output surpassed the one million mark for the second straight month,” said First American deputy chief economist Odeta Kushi. “An increase in single-family permits suggests cautious optimism on the part of builders and suggests that the San Francisco market is ripe for growth,” Kushi added.
Data from the University of Michigan Consumer Confidence Index also hit the markets. Consumer confidence data came in at 79.6, slightly lower than the expected value of 80.
Additionally, here you can see some of Wall Street’s biggest moves on the trading day.