Coffee With Greta: More HOT Inflation Data


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DJIA Futures: +352 (+1.0%)

SPX Futures: +55 (+1.3%)

NASDAQ Futures: +244 (+1.8%)

Good morning friends!

Futures are higher as the market digests some more hot inflation data and Russia-Ukraine tensions appear to be cooling.

Let’s get right to it!

U.S. Producer Prices Surge 

The Bureau of Labor Statistics released more hot inflation data this morning. 

The Producer Price Index surged 9.7% year-over-year in January, higher than expectations for 9.1%.

On a monthly basis, the PPI rose 1.0% vs expectations for 0.3%. 

The Core PPI, which excludes food, energy, and trade prices, jumped 0.9% monthly and 6.9% annually. 

Both of those readings were higher than expected.

This comes after the CPI surged 7.5% year-over-year in January, marking the fastest pace of inflation in 40-years.

The higher producer prices are expected to contribute to higher consumer inflation down the line, as producers pass down those costs.

Russian Troops Pull Back from Ukraine Border

Oil prices are retreating, stock futures are higher, and cryptocurrencies are up after Moscow announced it is pulling back some of the troops at the Ukraine border.

U.S. crude prices are down nearly 3%, under $93 per barrel. 

Oil prices hit a seven-year high as tensions appeared to escalate on Monday. 

Over the past 24 hours, Bitcoin is 3.7% higher while Ethereum has risen 5.7%. 

The bounce comes as there appears to be a deescalation between Russia and Ukraine.

A spokesman for the Russian Ministry of Defense said the troops had completed their military drills along the Ukraine border and will begin moving back to their bases today.

But NATO officials are urging caution in taking Russia’s word. NATO Secretary General Jens Stoltenberg said the group had “not seen any sign of de-escalation on the ground from the Russian side.”

The tensions stem from Ukraine’s desire to join NATO, while Russia wants that to never be allowed to happen. Moscow also wants NATO to shrink its presence in Eastern Europe.

Israeli Chipmaker Soars on Intel Acquisition News

Tower Semiconductor (TSEM) shares are up 41% in premarket trade following a report that it is about to acquired by Intel (INTC).

The Wall Street Journal reported Monday evening that Intel was looking to buy the chipmaker for nearly $6 billion.

The acquisition is reportedly part of Intel’s plans to expand its manufacturing capabilities. 

TSEM shares soared more than 50% in after-hours trade following the announcement. 

Tower Semiconductor has manufacturing facilities in Israel, Italy, California, and Texas. 

It also owns a 51% stake in Tower Partners Semiconductor, which has three locations in Japan. 

INTC shares are 1.1% higher ahead of the open.

In Case You Missed It

  • St Louis Fed President James Bullard reiterated his hawkish stance on monetary policy Monday. He told CNBC the bank is already behind on inflation and needs to “front load” rate hikes. Bullard is calling for interest rates to be a full 1% higher by July, which would mean one 0.5% hike in the next three meetings. He is a voting member of the FOMC this year and said he will try to convince his colleagues that his position is correct.
  • Shares of the major vaccine makers tumbled Monday as COVID cases wane. Moderna (MRNA) shares plunged 11.7%, BioNTech (BNTX) tumbled 9.6%, Pfizer (PFE) fell 1.9%, and Johnson & Johnson (JNJ) closed 1.3% lower. The drop comes as Omicron cases are rapidly dropping across the U.S. The seven-day average of cases in the U.S. plunged 42% in the past week, to 175,000 as of Sunday.

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