Breakfast Bites - US PPI, UK Wages and tough data from Germany

Rise and shine everyone.

As the US markets await the PPI release later today, the focus this morning is on Home Depot earnings. While the company beat estimates both on EPS (beat by 14 cents) and revenue, they issued lower-than-expected guidance. The obvious reason for the lower guidance was higher interest rates, causing people to slow down their home-improvement spending. The stock is 2% and dragging the Dow lower as well.

Meanwhile, the SPX and Nasdaq futures are marginally higher this morning, with the Russell 2000 still lagging. Yesterday, we saw a flattish close with the IWM lagging. US Treasury yields are marginally lower, while the Yield Curve is steepening yet again. The Dollar is flat.

Overall, commodities are lower but Gold hit another record, crossing $2500/oz.

Asian markets were mixed. Nikkei 225 surged 3.5%, Yen weakened 0.5% as Japan markets returned from holiday on Monday and played catch up from the weekend.

Europe is lower. Germany saw the biggest drop in ZEW sentiment data in 2 years and the lowest since the February reading. The report notes that "The economic outlook for Germany is breaking down." The ZEW Indicator of Economic Sentiment for Germany plunged to 19.2 in August 2024 from 41.8 in July.

Finally, the hot topic for this week will be Former President Donald Trump’s chat with Elon Musk on X. I listened to most of it, and without commenting on the content, I have to say that it definitely was quite freeform.

Oh, and the Vix was back below 20!

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