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Wholesale prices fall 0.7%

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This morning's Producer Price Index (PPI) shows prices paid at the wholesale level fell 0.7% in December, which was lower than economists' expectations for a decline of 0.2%. The core PPI, which takes out the more volatile food and energy prices, fell 0.1%. Economists were looking for the core rate to edge higher by 0.1%. This morning's PPI numbers show that any type of inflationary pressure is still not present and leaves the proverbial door open for further interest rate cuts from the Federal Reserve if needed. The FOMC's next meeting is January 29-30.

Stock future hover near unchanged levels

Stock futures were mixed to slightly higher before this morning's release of the PPI data and have been dipping just fractionally lower since the release. Currently we're seeing S&P futures trade up $0.60 at 1,159.70, while NASDAQ futures dip red by $1.50 at 1,664.50 and Dow futures trade down 3 points at 10,070.

Fair value for the S&P 500 today is $1.17. HL Camp & Company has their computers set for program buying at $2.63 and set for program selling at $-0.01. Fair value for the NASDAQ-100 today is $5.55.

Little reaction from Treasuries or precious metals

This morning's PPI numbers are having little impact on the equity markets and Treasuries are seeing their YIELDS little changed. Also quiet are the precious metals futures. February Gold futures (gc02g) are edging higher by $0.70 at $288.10, while March Silver futures (si02h) are unchanged at $4.70 and March Copper (hg02h) is down fractionally at $0.70.

Yesterday's after-market news

Cree Inc. (CREE) $30.65 -1.82% ... reported earnings of 8 cents, misses estimates by a penny as consensus was for 9 cents. Stock trading $27 in pre-market this morning.

Rational Software (RATL) $22.17 +1.5% ... Reports earnings of 7 cents a share, beating estimates by a penny. Stock trading $23.50 in pre-market action.

Borders Group (NYSE:BGP) $20.35 -2.39% ... Company issues UPSIDE earnings warning for Q4; sees earnings in the $1.31-$1.34 per share range vs. consensus estimate of $1.25. Company said Friday after Thanksgiving to January 6th holiday period achieved comparable store sales of 5.1% gain. Stock traded as high as $21.96 in last night's after-hours trading.

Rambus (RMBS) $8.59 +0.46% ... Stock trading $9.25 in pre-market after last night's earnings announcement that the company reported earnings of 6-cents a share, better than estimates of 5 cents. Revenues declined 28% to $24.9 million, below consensus of $26.6 million.

Jeff Bailey
Senior Market Technician
Option Investor

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