NEWS
Inflation’s Progress Empowers Bulls

Better-than-expected inflation data helped get the bulls back on track, with tech and offensive market sectors leading. Bulls hope that tomorrow’s consumer price data can keep the party going. Let’s see what you missed. 👀

Today's issue covers PPI and Home Depot sending similar signals, Starbucks stealing Chipotle’s CEO, and a big earnings move in Sea Ltd. 📰

Here’s the S&P 500 heatmap. 10 of 11 sectors closed green, with technology (+3.07%) leading and energy (-0.97%) lagging.

And here are the closing prices: 

Most bullish/bearish symbols on Stocktwits at the close: 📈 $LWAY, $CLW, $XP, $SLRN, $EXPRQ 📉 $SBUX, $PAVM, $QH, $TME, $RUM*

*If you’re a business and want to access this data via our API, email us.

ECONOMY
PPI Surprises While Home Depot Cautions 😵‍💫

Inflation’s downward trajectory continues, with headline producer prices (PPI) rising just 2.20% YoY, down from its 2.70% rise during June. The 0.10% MoM increase was also less than the 0.20% estimate, while core was flat MoM.

Final demand goods prices rose the most since February, but the largest service slide since March 2023 helped keep overall prices in check. 👍

Speaking of inflation, popular housing barometer Home Depot signaled that some deflationary behavior continues among consumers.

CFO Richard McPhail said consumers have had a “deferral mindset” since the middle of 2023, with high interest rates causing them to put off buying and selling homes or taking on bigger projects like kitchen renovations until rates come down. 🗓️

All this boils down to a more cautious consumer contending with record prices, high interest rates, and a slowing economy. This has resulted in seven consecutive quarters of negative comparable sales.

And Home Depot doesn’t expect this to resolve itself anytime soon. Management now expects full-year comparable sales to decline 3% to 4% vs. its previous guidance of a 1% drop. 📉

Overall, Home Depot had expected this and has been playing defense, allowing it to properly manage Wall Street’s expectations and beat expectations via operational efficiencies.

That said, customer transactions fell 2% YoY, and the average ticket declined just over 1%, showing further evidence of slowness on the demand side. 🔻

Shares initially traded down as much as 6% in pre-market trading but ended the day up 1%. Still, Stocktwits users are skeptical, with sentiment currently sitting in ‘extremely bearish’ territory ahead of Lowe’s, Walmart, and other consumer-related reads expected later this week. 🐻