Stock futures are meandering either side of unchanged after economic data released this morning shows a struggling U.S. economy generating no inflation while weekly jobless claims improved modestly and business inventories in March rose.
The headline numbers that are grabbing trader's attention this morning are the April Producer Price Index (PPI) and Core PPI data, which showed the PPI plummeting -1.9% in the latest month, which was well below economist's forecast for a decline of 0.7%. The core rate, which excluded the more volatile food and energy components, fell 0.9%, also below economist's forecast for a 0.1% decline.
The 1.9% decline in wholesale prices for April is a record and the largest drop since October 2001, when the PPI fell 1.6%. April's core PPI decline of 0.7% is the largest decline since 1.2% in August 1993. The April PPI data will most likely fuel further concerns regarding deflation after the Federal Reserve last week said it saw increasing risks falling prices could unsettle the economic recovery here in the U.S.
On the jobs front, the Labor Department said jobless claims fell by 13,000 to 417,000, which is the lowest level in more than a month and was better than economist's forecast of 430,000. The four-week average fell by 7,500 to 439,700, the lowest level since the week ended April 12. The number of Americans who continue to collect benefits remains high with the insured unemployment at 3.77 million, up 120,000 and the highest since November 17, 2001. The four-week average of continuous claims rose by 57,000 to 3.66 million, which is the highest level since June of 2002.
In yet another economic report released this morning, the Commerce Department reported that March business inventories rose by 0.4%, which was higher than the 0.2% forecast of economists. Manufacturers' and trade inventories (excludes semiconductors) were estimated at $1.72 billion, the highest since August 2001, and marks a 4% rise year-over-year from March 2002. March's 0.4% rise in inventories comes after February's 0.6% rise.
The U.S. dollar is finding some buying this morning, and it comes after key economic data released in the eurozone showed lack of economic growth. In recent weeks, it has been perplexing to some currency traders how weak the dollar has been against the euro as some questioned if the European economy was any stronger than the U.S economy.
The U.S. Dollar Index (dx00y) is gaining 0.17 (+0.2%) to 94.77.
Germany's economy fell by 0.2% in the first quarter, as exports were weak. The Federal Statistics Office said the -0.2% "growth" followed a "flat" reading in the fourth quarter.
The eurozone GDP saw no growth in the first quarter.
Here in the U.S. traders are now looking at a higher open after stock futures were meandering near unchanged levels, but have started to build some meaningful gains with S&P futures (sp03m) rising 3.7 points to 944. NASDAQ futures (nd03m) are rising 8.5 points to 1,159.50, while Dow futures (dj03m) are gaining 32 points to 8,680.
Fair value for the S&P 500 today is $-0.34. That price will not change during the session. HL Camp & Company has their computers set for program buying at $0.46 and set for program selling at $-1.72.