Rover's Weekly Market Brief — 10/13/2017

Economy

The Producer Price Index (PPI) – Final Demand measure of wholesale inflation was up +0.4% in September, with yearly inflation up +0.2% to +2.6%. Refinery damage due to the hurricanes helped boost gasoline prices by +10.9%, forming the main component of the overall increase, but the hurricanes had negligible effects on food prices, which were flat after a -1.3% fall in August. Excluding the volatile food, fuel, and trade services components, core PPI inflation was up +0.2% for the month and +2.1% for the year.

The Consumer Price Index (CPI) measure of consumer inflation followed a +0.4% August increase with a +0.5% gain in September, raising the yearly rate by +0.3% to +2.2%. As with the PPI, an increase in the cost of gas (+13.1%) was the main contributor to the overall increase. Removing the food and energy components cut the increase to +0.1% and kept yearly core inflation unchanged at +1.7%. Cell phone service costs (+0.4%) increased for the first time in 14 months, with other increases including car insurance (+0.5%), recreation (+0.2%), education (+0.3%), and shelter (+0.3%). The increases offset declines in new vehicles (-0.4%), used vehicles (-0.2%), household furnishings (-0.3%), and medical care (-0.1%).

Retail and food sales were up +1.6% for September, with hurricane recovery likely influencing increases in sales at auto dealers (+3.6%), service stations (+5.8%), and gardening and building material stores (+2.1%). September sales also increased for grocery stores (+1.0% M/M, +3.0% Y/Y), restaurants (+0.8% M/M, +2.7% Y/Y), and online retailers (+0.5% M/M, +9.2% Y/Y), but decreased for electronics and appliances (-1.1% M/M, -4.4% Y/Y), department stores (-0.4% M/M, -0.5% Y/Y), health and personal care (-0.4% M/M, +0.4% Y/Y), and furniture (-0.4% M/M, +1.7% Y/Y). On a yearly basis, September sales were up +4.4% vs +3.5% for August, and excluding volatile auto sales brings September’s yearly sales up +4.6% vs August’s +4.1% increase.

Upcoming Economic Reports:

Tuesday October 17 – Industrial Production

Friday October 20 – Existing Home Sales

Earnings Calendar:

 

Monday	Tuesday	Wednesday	Thursday	Friday
Netflix (NFLX)	Johnson & Johnson (JNJ)	Abbott Laboratories (ABT)	Taiwan Semiconductor (TSM)	Proctor & Gamble (PG)
Charles Schwab (SCHW)	UnitedHealth Group (UNH)	US Bancorp (USB)	Verizon Communications (VZ)	General Electric (GE)