Strong Wholesale Inflation Provide Backdrop For Market Action

A somewhat hotter than expected wholesale inflation reading and a couple of mixed earnings reports provide the backdrop for today’s stock market action.

The wholesale inflation report doesn’t necessarily mean that the retail inflation number (CPI) coming out on Thursday will show similar spike, though some signs of inflationary pressures will not necessarily be bad. The bond market’s tepid reaction to today’s PPI report shows that it isn’t overly concerned about the inflation situation, at least not yet.
On the earnings front, we got reports from Macy’s (M) and Deere & Co (DE) this morning, while Cisco (CSCO) will report after the close. Deere’s earnings and revenues were below the year-earlier level, though effective cost controls helped the farm-equipment giant beat top- and bottom-line estimates.

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