By James Langton
(September 14 – 09:00 ET) – U.S. PPI came in up 0.1% on the headline, down 0.2% on the core rate (ex food and energy). Retail sales were reported up 0.2%. Economists were expecting headline PPI to be up 0.1% and 0.2% on the core, and they saw retail sales up 0.3%.
The numbers are positive for equities, showing that energy inflation seems to still be contained, although tomorrow’s CPI will be more important to the Fed in making that judgement. The slower than expected retail sales are a positive, too, confirming the slowing hypothesis.
Canadian CPI came in below expectations, with the annual headline rate at 2.5%, below the 3% economists were expecting. The core rate came in on target at 1.5%, remaining right where the Bank of Canada wants it. Later today Bank of Canada governor Gordon Theissen speaks on the economic outlook and monetary policy in Calgary.
Overnight in Europe, the European Central Bank surprised traders, saying it would defend its currency by selling the US$2.5 billion of interest earned on its foreign exchange reserves. This sparked a rally in the euro and stocks, too. The FTSE is up about 81 points to 6,559. The CAC 40 is up 85 points to 6,654. The DAX has added 85 points to 7,092.
Stocks that have been hit with currency concerns and growth fears of late are leading the rally, names such as Alcatel, Vodafone AirTouch, and Marconi are up.
The M&A slate is quiet today, although General Motors has agreed to double its stake in Suzuki Motor Corp. to 20% for US$653 million.
Overnight in Asia stocks closed mixed. The Nikkei staged a small rally, finishing up 23 points to 16,213. The Hang Seng dropped 234 points to 16,395.
Thomson Corp. announced that it has completed its US$1.013 billion acquisition of the Primark Corporation, adding to its electronic content.
Mitel is out boasting of expansion plans, including that it’s looking to hire 400 new semiconductor engineers in Ottawa.