Inflation, earnings reports, Monday markets, possible railroad strike and more: 5 things to know for Tuesday


Here are the key events happening on Tuesday this could have an impact on trade.

INFLATION INDICATOR: A key inflation indicator at the wholesale level is coming Tuesday morning.

As of 8:30 a.m. ET, the Bureau of Labor Statistics is expected to report that the PPI rose 0.4% month over month according to the Refinitiv forecast, unchanged from a warmer-than-expected print of 0. .4% in September.

Year-over-year, prices paid by wholesalers are expected to jump 8.3%, less than September’s 8.5% rise and the fourth consecutive month of slower growth.

It would also be the lowest reading since July 2021, and with last week’s fresher than expected October CPI report, it could bolster hopes of lower Fed rate hikes.

INFLATION KEEPS US ECONOMY IN OCTOBER AS PRICES REMAIN COMPULSORY HIGH

Miami, Surfside, Florida, Publix grocery store, checkout line cashier. (Jeffrey Greenberg/UCG/Universal Images Group via Getty Images/Getty Images)

Excluding food and energy costs, core producer prices are expected to rise 0.3% per month in October, matching the 0.3% gain recorded in September.

Year-over-year core PPI growth is expected to hold steady at 7.2% in October, the seventh straight month of flat or slowing growth after a record 9.7% rise in March ( data goes back to April 2011).

At the same time, the New York Federal Reserve will release its closely watched indicator of regional manufacturing activity.

The Empire State Manufacturing Survey is expected to hit -5.0 in November, remaining in contractionary territory for a fourth month after unexpectedly dipping to -31.3 in August (a number below zero means more manufacturers of New York area say business conditions are getting worse than improving).

LOW STOCK: U.S. stocks ended lower on Monday after last week’s big rally, as investors digested fresh comments from Federal Reserve officials on the prospect of further interest rate hikes.

The S&P 500 fell 35.68 points, or 0.9%, to 3957.25, and the NASDAQ Composite fell 127.11 points, or 1.1%, to 11196.22. The Dow Jones Industrial Average fell 211.16 points, or 0.6%, to 33,536.70.

Stocks have risen in recent days on hopes the Fed won’t have to tighten financial conditions much more after US inflation in October fell below economists’ estimates. The Fed’s quest to control inflation this year has dragged down stocks, bonds and commodities.

MORTGAGE RATES RISE BACK ABOVE 7%

Traders at the New York Stock Exchange

Traders work on the floor of the New York Stock Exchange in New York, Wednesday, November 2, 2022. (AP Photo/Seth Wenig/AP Pictures)

Some of the excitement from last week has died down to start the week. Of the 11 sectors in the S&P 500, only healthcare stocks rose. The Real Estate, Consumer Discretionary and Utilities groups posted the largest declines.

“Just because there might be a spike in inflation, just because the Fed is slowing down, doesn’t actually mean it’s starting a new bull market because the risk of a recession is still relatively high for the US. next year,” said Keith Lerner, co-chief investment officer. at Truist Advisory Services Inc.

Lerner noted that stocks don’t always rally when the Fed cuts rates, pointing to the performance of the S&P 500 in 2000.

Fed Vice Chairman Lael Brainard said on Monday that recent inflation data offered reassuring signs that price pressures were no longer spreading and that the central bank could soon ease the pace. increases in interest rates.

But Fed Governor Christopher Waller said over the weekend that policymakers still have “some way to go” and would like to see more similar data points before releasing the brake.

Traders and investors said one data point is not enough to warrant the Fed backing away from its aggressive bullish stance. Many are already looking to the economy to see how it has handled previous rate hikes.

“We’ve seen inflation come down, but I wouldn’t call that a trend,” said Jason Ray, founder and chief investment officer at Zenith Wealth Partners. “We still think the Fed will be hawkish and take action to slow the economy.”

3T GAINS: Retail giants and Dow members Walmart and Home Depot released their quarterly results on Tuesday morning, kicking off a busy week for retail earnings.

A customer walks into a Home Depot store in San Rafael, California on August 16, 2022.

Shares of retailer Home Depot surged early last week after posting better-than-expected earnings. (Photo by Justin Sullivan/Getty Images/Getty Images)

Watch for numbers from auto parts retailer Advance Auto Parts after the closing bell.

Teleprinter Security Last To change To change %
WMT WALMART INC. 138.39 -4.19 -2.94%
HD THE HOME DEPOT INC. 306.92 -8.02 -2.55%
ARMK ARAMARK 38.86 +0.13 +0.34%
ENR ENERGIZER HOLDINGS INC. 29.60 +0.17 +0.58%
DNUT KRISPY KREME 14.17 -0.09 -0.63%
TME TENCENT MUSICAL ENTERTAINMENT GROUP 4.45 +0.04 +0.91%
AAP ADVANCE AUTO PARTS INC. 183.78 -2.61 -1.40%

More than 90% of the S&P 500 (465 companies) released Q3 numbers and so far the results are ahead of expectations.

RAILWAY STRIKE ON THE HORIZON? : The International Brotherhood of Boilermakers (IBB) announced on Monday that its members had voted against ratifying a tentative agreement with major freight railways, making BWI the third union group to refuse the agreement brokered by the Biden administration and increasing the chances of a nationwide strike.

The BWI said in a statement it had now entered a “cooling off” period and planned to continue negotiating with the National Carriers’ Conference Committee (NCCC), which represents the largest railways in the world. countries including BNSF, CSX, Norfolk Southern and Union Pacific.

IBB joins the Brotherhood of Railroad Signalmen (BRS) and the Brotherhood of Maintenance of Way Employees Division of the International Brotherhood of Teamsters (BMWED) in rejecting proposed contracts offering railroad workers a 24% wage increase over the course of the five-year period from 2020 to 2024.

RAILWAYS ‘DISAPPOINTED’ SOME UNIONS REJECTED INITIAL AGREEMENT: IAN JEFFRIES

Railway unions could go on strike in December

A freight train passes an oil refinery in the Port of Los Angeles in Wilmington. A major railway strike is looming that could cripple the country’s supply chain and rail service if the two sides fail to reach an agreement by the end (Luis Sinco/Los Angeles Times via Getty Images/Getty Images)

Unionized railroad workers opposed to the tentative deal brokered by President Biden’s Presidential Emergency Board (PEB) are upset that the deal didn’t do more to address quality-of-life issues, particularly the lack of furloughs. sickness and working with reduced teams.

Teleprinter Security Last To change To change %
UNP UNION PACIFIC CORP. 216.95 -0.55 -0.25%
CSX CSX CORP. 31.80 -0.14 -0.44%
NSC NORFOLK SOUTH CORP. 251.68 +0.77 +0.31%

Several union members told FOX Business they were frustrated that their union representatives approved the PEB recommendations in September, arguing that the agreement did not do enough to improve working conditions.

The 12 unions involved in the negotiations must agree to ratify their new contracts or a strike could ensue, devastating supply chains and the economy as a whole, costing an estimated $2 billion a day. Congress is expected to get involved if a work stoppage is triggered, but several unions have agreed to continue negotiations until early December.

PENDING STUDENT LOAN DOCUMENT: A federal appeals court on Monday accepted a preliminary injunction to halt President Biden’s plan to forgive student debt for millions of borrowers.

The decision by a three-judge panel of the 8th U.S. Circuit Court of Appeals in St. Louis came days after a federal judge in Texas blocked the program.

“The injunction will remain in effect until further notice from this court or the Supreme Court of the United States,” Monday’s ruling said.

STUDENT LOAN REFINANCING INTEREST RATES INCREASE FOR 5 AND 10 YEAR LOANS

Joe Biden speaking in the White House dining room

President Joe Biden speaks in the State Dining Room of the White House, Saturday, March 6, 2021, in Washington. (AP Photo/Alex Brandon/AP Newsroom)

The judge in the Texas case said the plan usurps the power of Congress to make laws. The Texas case has been appealed, and the administration is likely to appeal the 8th Circuit’s decision as well.

In the ruling, U.S. District Judge Mark Pittman — a Fort Worth-based Trump appointee — criticized how the program moved forward without congressional approval.

“In this country, we are not governed by an all-powerful executive with a pen and a phone. Instead, we are governed by a Constitution which provides for three separate and independent branches of government,” he said. writing.

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The Biden administration has stopped accepting planned relief requests. The plan would forgive $10,000 of student loan debt for those earning less than $125,000 or households with incomes below $250,000. Pell Grant recipients, who typically demonstrate greater financial need, would get an additional $10,000 in debt forgiveness.

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