Market Pulse - PPI Data Out, Market Tanks

Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

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Here’s what hit the tape 

• Headline PPI m/m: +0.9% (vs. +0.2% expected)
• Headline PPI y/y: +3.3% (vs. +2.5% expected)
• Core PPI m/m: +0.9% (vs. +0.2% expected)
• Core PPI y/y: +3.7% (vs 3.0% expected)

The jump came mostly from services prices and retail margins. That’s where the surprise is hiding. Now, one hot print doesn’t flip the whole script, but if we see it again next month, it could start feeding into CPI, and that’s when the FED will have to pay closer attention. 

How the market took it 

As soon as the numbers hit, risk assets took a hit. Around $420M in late longs got flushed. Yields crept higher, and the dollar chopped around. This market’s been running hot for weeks, so we see this more as a clean-up move than a trend change. 

Cryptonary’s Take 

We’re still in a bull market, and we’ve still got a rate-cutting cycle ahead of us. Even after this print, September cut odds are high. Pullbacks like this are healthy. They take some of the froth out and give us better spots to reload. 

Important to note, Trump is pushing for lower interest rates, while Trump's family is setting up "Treasury" companies that are accumulating crypto. Thus, the bigger picture remains the same: we remain allocated and are buying the dips. 

What’s next 

We’ve got a few big data drops coming:

• Fri 08:30 ET: Advance Retail Sales, Empire State Manufacturing
• Fri 09:15 ET: Industrial Production
• Fri 10:00 ET: University of Michigan Sentiment prelim, Business Inventories

We’ll go deeper on these in the next Market Update. 

Stay tuned!