18th Mar 2010
Day Trading Wednesday March 17, 2010: February Producer Price Index (Ppi), Weekly Mortgage Applications, Petroleum Report
The February Producer Price Index is down 0.6% compared to the jump in January of 1.4%. The PPI measures the prices at the producer level before passing the cost along to the consumer. Inflation at the producer level will be passed along to the consumer as well. Increasing inflation would mean higher interest rates and higher equity prices. Decreasing inflation would mean lower interest rates and lower equity prices.
Yesterday the FOMC announced that interest rates will remain low as the economy recovers. This may indicate that inflationary pressures are unlikely in the near future. Equities to watch on these numbers include: Consumer staples, food processing, and retail grocers.
Some of the stocks to watch within this sector include: ConAgra Foods and Heinz. Both ConAgra Foods (CAG) and Heinz (HNZ) broke its 52 week high of 25.82 and 47.55, respectively. These consumer staples stocks have a strong upward trend since the end of January.
The weekly mortgage applications decreased 1.9% on a seasonally adjusted basis from one week earlier. Lower rates are no longer boosting the demand for homeowners to refinance as the index fell 1.7%. The weekly Mortgage Bankers’ Association Purchase Applications is a leading indicator for single-family home sales and housing construction. Equities to watch on these numbers include: Home builders, mortgage lenders, and home furnishings companies.
Some of the stocks to watch within this sector include: Home Depot and Lowe’s. Home Depot (HD) peaked at its 52 week high of 31.81 and it has a strong trend on the daily chart. Lowe’s reached its 52 week high back in December and it is currently nearing the highs again of 25.25.
Crude oil inventories rose for seven straight weeks up 1 million barrels to 344.0 million barrels. The OPEC cartel announced that it will keep oil output ceiling unchanged as it will keep its profit from the falling dollar. Oil ticked up 88 cents following inventory data to $82.58. Equities to watch on these numbers include: Oil Well, refineries and gas operations.
One of the oil-related sector stock to watch includes Baker Hughes. Baker Hughes (BHI) peaked at its 52 week high of 52.41 and has a strong upward momentum since the end of 2009.
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About the Author:
Shamim Ziyaaudhin is one of the editors of TraderMongers.com, a one stop trading news feed source for worldwide traders and investors. Their philosophy is to establish the standard for providing market news feed that is comprehensive, accurate, and concise. Providing technical and fundamental trading setups, economic numbers, and calendar events throughout the trading day. Shamim has a Masters in Business Administration from Fairleigh Dickinson University and holds a degree in Psychology from Rutgers University.
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