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Inflationary headwinds tighten stock market brakes, but indices cut most losses

Most indices opened sharply lower on Thursday but rallied significantly from session lows. Stocks continued to be in the red as a higher than expected producer price index of 11.3% followed yesterday’s high CPI readings in the pre-market hours.




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A widely anticipated 100 basis point hike from the Fed also caused the downward slide. Financials also pressured stocks after profit losses of JPMorgan Chase (JPM) and Morgan Stanley (MRS).

The market recouped most of its loss at the close, in action that looked like Wednesday.

After outperforming the other indexes on Wednesday, the Russell 2000 was the hardest hit and lost 1.3%. The Nasdaq managed a 0.03% gain after losing 2% in the morning. The Dow Jones Industrial Average, which was down 600 points earlier in the day, closed down 0.5%, down 142 points.

The S&P 500 fell 0.3%. The innovative IBD 50 (FFTY) also recovered and closed up 0.5%.

Volume rose on the NYSE and Nasdaq, according to preliminary data.


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Stocks in motion today

A few stocks are up sharply despite the dimmer outlook after yesterday’s and today’s inflation reports. Positive action may not be sustained depending on economic headwinds that put pressure on markets.

Privia Health Group (PRVA) continues its ascent above its cup bottom. The stock rebounded from higher volume last week as it found support at its 50-day moving average. The stock is extended beyond its point of purchase. In the prior quarter, the company exceeded revenue estimates by 47%.

BP Prudhoe Bay Royalty Trust (BPT) exceeded the 50-day moving average in strong volume, indicating an increase in institutional sales. The breakout appears to be a sell signal.

Encore Capital Group (ECPG), an IBD 50 stock, forms a cup basis with a buy point at 72.77. His relative strength rating is a solid 97.

Big BJ club (B.J.) is another stock to watch as it forms a double bottom base and is close to its entry point of 71.10.

After promising action in a mug base with handle earlier this month, AT&T (J) fell below its 50-day moving average. Its downtrend is however on lower volume.

Qualcomm (COMQ) breaks long-term resistance around the 50-day line and climbed 4.6% on Thursday. It remains deep in a correction.

Shares of Auctioneers Ritchie Bros. (RBA) hover near the buying point of 68.02 from a cup with handle. The company beat first-quarter earnings estimates after missing estimates in the previous three quarters.

The SPDR Energy Select Sector (XLE) slipped below the 200-day line today after falling almost 2%.

The 10-year Treasury yield rose slightly to 2.963%.

The euro fell below parity with the dollar due to weaker growth and higher inflation prospects combined with fears of a cut in the Russian gas pipeline to Europe. The European Commission also forecasts record inflation of 7.6%, a stronger rise than the previous estimate of 6.1% for 2022. Europe’s economic expansion is also expected to be weaker in 2023 than in 2022. at 1.4%.

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