(May 12 – 09:00 ET) – The April U.S. Producer Price Index was reported today. It came in on target — down 0.3%. The core rate is up 0.1%. The numbers indicate that inflation is still scarce. Many traders are still calling for the U.S. Federal Reserve to raise bank rates by 50 basis points. But with the low inflation numbers that have been reported this week a 25 bps move seems more likely now.
In Canada today, the New Housing Price Index was released indicating that the index increased 0.1% between February and March. On an annual basis, this index of contractors’ selling prices for new houses rose 2.0%.
Traders are generally buoyed by two days of favourable data, sending stock futures and foreign markets up. Computer stocks are strong on the heels of Dell’s good earnings yesterday. London’s FTSE is up 22 points to 6268. The French CAC 40 gained 59 points to 6438. Germany’s DAX added 12 points to 7271.
In Asia stocks staged a strong rally, led by techs. The Nikkei added 475 points to 17357. The Hang Seng gained 619 points to 15112.