This morning, the Producer Price Index for September came in well above estimates, rising 0.8% overall and 0.2% at the core level. Year over year, PPI is up 6.9%, its largest such rise since 2009. In addition to gas, food, and truck price increases, the costs of raw materials and other early stage inputs drove the increase. Keep in mind, the PPI is more volatile than its cousin, the Consumer Price Index. The CPI for September will be released Thursday with expectations for an increase of 0.3% and ex food and energy plus 0.2%.
Stocks fell hard Monday on weak earnings and the continued stalemate in resolving the European financial crisis. This morning both stocks and bonds are trading relatively flat with the yield on the 10 year note slightly lower at 2.135%. Mortgage prices have improved another .125% to .25%.
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