Key Takeaways
- The US Producer Price Index (PPI) for July significantly surpassed expectations, with final demand month-over-month rising 0.9% (estimated 0.2%) and year-over-year at 3.3% (estimated 2.5%), leading to a 0.5% drop in NASDAQ 100 Futures and a 0.4% decline in gold prices. This data prompted traders to reduce expectations for a Federal Reserve rate cut.
- Eli Lilly (LLY) has reportedly increased the UK price of its weight loss drug Mounjaro by as much as 170%, according to the Financial Times.
- The White House confirmed that President Trump and Russian President Putin plan to hold a joint press conference after their meeting. White House Press Secretary Karoline Leavitt stated the Ukraine war is "highly complex" and that Trump has "many tools" at his disposal, including sanctions, to explore peace options.
- Germany's 10-Year Bond Yield rose slightly to 2.6828% (+0.5 basis points) following the release of the stronger-than-expected US Producer Price Index data. The 2-Year Bond Yield remained nearly unchanged at 1.9337%.
The US Producer Price Index (PPI) for July significantly exceeded forecasts, indicating stronger inflationary pressures than anticipated. Final demand PPI rose 0.9% month-over-month, far surpassing the estimated 0.2%, and climbed 3.3% year-over-year, compared to a 2.5% estimate. This unexpected surge in producer prices had immediate repercussions across financial markets.
Following the PPI data, NASDAQ 100 Futures dropped 0.5%, reflecting investor concerns over potential implications for monetary policy. Gold prices also experienced a decline, falling 0.4% to $3341.99/oz after the release of the US economic data. Traders subsequently reduced their expectations for a Federal Reserve rate cut, as the robust economic data suggests less urgency for monetary easing. Meanwhile, US initial jobless claims for the week ending August 9 came in at 224,000, slightly below the estimated 225,000, with continuing claims at 1.953 million.
In corporate news, Eli Lilly (LLY) has reportedly implemented a substantial price increase for its weight loss drug Mounjaro in the United Kingdom. The price has been hiked by as much as 170%, a development reported by the Financial Times.
On the geopolitical front, the White House announced that President Trump and Russian President Putin are scheduled to hold a joint press conference after their upcoming meeting. White House Press Secretary Karoline Leavitt emphasized that the Ukraine war is a "highly complex" issue. Leavitt further stated that President Trump has "many tools" at his disposal to address the situation, including the potential use of sanctions. The White House also indicated that President Trump aims to explore every possible avenue to achieve peace during his discussions with the Russian leader.
In the bond market, Germany's 10-Year Bond Yield saw a slight increase, rising by 0.5 basis points to 2.6828% following the release of the US Producer Price Index data. Conversely, Germany's 2-Year Bond Yield remained largely stable at 1.9337%. Separately, the Romanian Defense Minister suggested that NATO's Black Sea members should consider expanding their de-mining task force to include patrols, aiming to enhance security in the region.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.