Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
Bank of America (BAC 3.35%) stock is making headway today, while the Dow Jones Industrial Average (^DJI 0.56%), of which the financial giant is a member, is down on no real news. As of 1:25 p.m. EDT the Dow is down 91 points, or 0.59%, to 15,360, while the S&P 500 (^GSPC -0.88%) is down 0.35% to 1,688.
There was one U.S. economic release today.
|
Report |
Period |
Result |
Previous |
|---|---|---|---|
|
Producer Price Index |
July |
0% |
0.8% |
|
Core PPI |
July |
0.1% |
0.2% |
The producer price index, a measure of inflation among manufacturers, was unchanged from June to July. Core PPI, which excludes food and energy prices, was up 0.1%. The numbers were below respective analyst expectations of 0.3% and 0.2%.
US Producer Price Index data by YCharts.
Over the past 12 months, the PPI has risen 2.1%, while the core PPI is up only 1.2%. Tomorrow we get more inflation data with the release of the Consumer Price Index, as well as data on industrial production and the housing market. In the absence of big news, the Dow continues its recent downtrend, led downward by Home Depot and Johnson & Johnson, which have both lost more than 2%.
Today's Dow leader
Today's Dow leader is Bank of America, up 1.2% after Morgan Stanley financials analysts released their list of top investment ideas. Financials have been doing increasingly well while the rest of the market's earnings growth is slowing. Banks especially have a tailwind behind them, as long-term rates have risen recently after the Fed suggested they could begin tapering as soon as the end of the year.
US 30 Year Mortgage Rate data by YCharts.
Banks get money in the form of deposits and loan it out at higher rates in the form of mortgages and other loans. The low rates of the past year have been a blessing and a curse as banks have benefited from people refinancing their mortgages to take advantage of the low rates, but they've been a curse in that the banks were not making much from loans. It remains to be seen how much banks and housing-market activity will be hurt by the rise in rates.
