Stocks Turn Volatile, Wholesale Inflation Stays Elevated In November

Barry Adams
09 Dec, 2022
New York City

Stocks on Wall Street eased and investors digested the latest read on inflation. 

Wholesale inflation was unchanged on a monthly basis and eased but remained elevated on an annual pace 

Investors are also awaiting consumer price data on Tuesday and the Fed's rate decision on Wednesday. 

Investors are hoping that widely watched consumer price inflation may show larger moderation in November as gasoline prices drop to a one-year low. 

 

U.S. Wholesale Inflation Stay Elevated 

The producer price index increased 0.3% in November from October and eased to 7.4% from a year ago on higher cost of services, the U.S. Bureau of Labor Statistics said.

Core rate of inflation in November accelerated to 0.4% from 0.1% in October but eased to 6.2% annual pace from 6.6% rate in October. 

 

Stock Market Indexes Trade Volatile 

Benchmark indexes opened higher but quickly lost direction lacking momentum after wholesale inflation data raised the prospect of higher terminal rates. 

The S&P 500 index fell 0.2% to 3,955.93 and the Nasdaq Composite index fell 0.3% to 11,046.73. 

Crude oil price increased 95 cents to $72.46 a barrel and natural gas prices rose 37 cents to $6.33 a thermal unit. 

The yield on 2-year Treasury notes rose to 4.33%, 10-year Treasury notes increased to 3.57% and 30-year Treasury bonds to 3.50%. 

 

China Inflation Eases 

 Consumer price index in China eased to 1.6% in November from 2.1% in October and declined by 0.2% from the previous month, the National Bureau of Statistics said Friday.

 

Brazil Inflation Drops to 20-month Low 

Brazil's inflation eased to an annual pace of 5.9% in November from 6.4% in October, the lowest since February 2021, after transportation and housing prices cooled, the statistical office said Friday.

 

U.S. Stock Movers 

Costco Wholesale Corporation eased 0.2% to $480.71 after the membership warehouse club operator said fiscal first quarter sales increased 8.1% to $53.4 billion. 

Net income increased to $1.36 billion from $1.32 billion or $3.07 from $2.98 a diluted share a year ago.

lululemon athletica Inc declined 12.5% to $328.01 after the company issued lighter guidance for the current quarter. 

The specialty apparel retailer said third quarter revenue increased 28% to $1.9 billion and net income soared to $255.5 million from $187.8 million or $2 from $1.44 a share a year ago.

For the fourth quarter of 2022, the company expects net revenue between $2.605 billion and $2.655 billion, representing a three-year compound annual growth rate of approximately 24%. 

Diluted earnings per share are expected to be in the range of $4.20 to $4.30 for the quarter.

DocuSign soared 12.8% to $49.37 after the company reported better-than-expected quarterly results. 

The only verification system provider said third quarter revenue increased 18% to $645.5 million and net loss widened to $29.8 million from $5.7 million or 15 cents from 3 cents a share from a year ago.