Heads-up: PPI + retail sales Thu Oct 15, 8:30 AM ET — PPI bar +0.6% m/m, retail bar +0.4%, after hot CPI
What happened
⏰ Heads-up: PPI + retail sales Thursday 8:30 AM ET — the last big inflation reads before the Oct 27-28 FOMC. CPI context: today's September CPI already came in hot — headline 3.7% y/y vs 3.6% consensus (up from 3.4% in August), core 2.6% vs 2.5% (up from 2.4%). Hike odds jumped to ~39% right after the print, easing to about one-third by the close. So Thursday is the follow-up exam: a second upside surprise would put a second consecutive hike firmly back on the table. PPI bar (WSJ survey medians): headline +0.6% m/m (prior +0.4%), core PPI (ex food & energy) +0.3% (prior +0.2%), PPI ex food/energy/trade +0.3% (prior +0.3%). On y/y, don't anchor to a single number — surveys are dispersed: WSJ median +5.5% (prior +5.4%), others at 5.3-5.4%. Watch the m/m core and ex-trade prints — they're the cleanest read on underlying pipeline pressure. Retail bar (WSJ survey medians): headline +0.4% m/m (prior +1.2%), ex-autos +0.5% (prior +1.4%). Other surveys sit a touch softer at +0.3% headline, and the control group (feeds GDP) is ~+0.3% vs +1.2% prior. Nominal-vs-real nuance: retail is nominal, and gas is flattering it — the Chicago Fed advance estimate had ex-auto nominal +0.4% but -0.7% inflation-adjusted, with regular gas ~$4.36-4.37 nationally (a record for this time of year) and diesel ~$6.32. A household spending the same dollars bought measurably less. One forecaster (Continuum) even expects +0.1% headline and -0.1% ex autos & gas — so the downside risk to the bar is real. Also watch August revisions. Same-slot 8:30 AM ET: jobless claims ~200K (WSJ median; prior 197K; one week-ahead had 202K), Empire State manufacturing 10.3 (prior 7.6), Philly Fed 32.0 (prior 37.8; other surveys as low as 26.5). Beige Book today: price pressures intensifying in more than half of districts, while Bowman said she sees no urgent need to hike. Business inventories follow at 10:00 AM (+0.4% expected). How to read it: • Hot PPI (headline ≥+0.6% and/or core ≥+0.4%) + firm retail (≥+0.4%) → second upside inflation surprise after hot CPI: Oct hike odds jump again, yields higher, growth/tech pressured. The Fed has cover to hike. • Hot PPI + soft retail (≤+0.1% headline, or negative in real terms) → stagflation-lite: pipeline inflation with a weakening consumer. Hardest mix for markets; the Fed is torn between inflation and demand. • Soft PPI (headline ≤+0.3%, core ≤+0.2%) + soft retail → validates the pause camp: hike odds fall back, relief for rate-sensitive/growth names — but watch for recession chatter if retail goes negative. • Soft PPI + firm retail → closest to goldilocks: disinflation with a resilient consumer. Best equity outcome, pause odds rise. TSMC Q3 earnings land earlier the same morning (2:00 AM ET) — covered by its own heads-up tonight. I'll flag the actuals as they land Thursday.
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- Broad market (S&P 500, Nasdaq, Dow — rate-path repricing); rate-sensitive growth/tech
- Treasury market (10-year yield spiked to 5.33% after CPI, then eased to 5.19%); banks/financials; consumer discretionary and retailers (retail read); energy (gasoline is flattering the nominal retail print).