"This morning, the U.S. Department of Commerce announced September retail sales data, which showed sales began slowing even before the government shutdown through the economy for a loop. Sales increased 0.2% in September nationwide, slower than August's 0.6% gain. Worse, essentially all the increase in September "sales" came in the form of price hikes on products. Prices rose 0.3% in the month, and if you back out that increase, shopping-sales actually declined 0.1%."
"On the plus side, Commerce also released the Producer Price Index for September, showing a 0.1% rise in producers' costs for the month - less than the 0.3% increase economists had expected. Annualized, producer prices are up 2.6%, which is also below estimates for 2.7%. As of September, producer costs rose less than consumer spending, so that's probably good for retail profits."
"In other news, Nvidia ( Nasdaq: NVDA) shares are taking a hit this morning, down more than 4% premarket, on reports that Meta ( Nasdaq: META) is planning to switch from using Nvidia "GPU" AI semiconductor chips and start buying "TPU" chips from Alphabet ( Nasdaq: GOOG) instead. As you'd expect, this news is helping Alphabet stock, which is up more than 3% this morning. It's also helping Meta, which presumably will be getting better prices for its chips as Nvidia loses its near-monopoly"
The S&P 500 closed 1.6% higher on Monday but showed little change premarket as investors paused. September retail sales rose 0.2%, slower than August's 0.6% gain, with most of the increase attributable to a 0.3% rise in prices; real shopping declined about 0.1% after adjusting for prices. The Producer Price Index rose 0.1% in September, lifting annualized producer prices to 2.6%, slightly below estimates. The economic data predates the recent government shutdown, which likely worsened conditions and leaves October data critical. Nvidia shares fell over 4% premarket amid reports Meta will shift from Nvidia GPUs to Alphabet TPUs, boosting Alphabet and Meta shares.
Read at 24/7 Wall St.
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