Back in Action and Eyeing Producer Prices
Apologies for briefly stepping away but I had to get to today’s 8 Things Moving the Market Today, which should be out shortly.
In response to the hotter-than-the-market-expected September producer price index (and thanks to Neil “the Facts” Sethi for covering it in more detail in the Comment section below), I will share a “as I suspected” moment:
Here’s the thing: If we follow the September PMI data from ISM and S&P Global, odds are it means we will see another step up in the September Producer Price Index data due on Thursday. Walking into Wednesday’s September CPI data, the market consensus called for flat to down figures headline and core PPI for September:
September PPI: 5.3% year over year versus 5.4% in August
September core PPI: 4.4% versus 4.6% in August
As we pointed out in our opening comments on Thursday morning, core PPI has been running over 4% on a year-over-year basis since April. With that trend at least continuing in September and likely heating up further during the month, barring any collapse in oil and related energy prices, inflation pressures will continue to ripple through the economy, especially as companies look to protect margins where they can.
On that September retail sales report, which saw spending accelerate across multiple categories even after we strip out that 28% year over year jump in gasoline station retail sales, it provides a very nice yardstick by which to measure upcoming retail facing earnings with its 5.4% year over year increase for Retail only sales in Q3 2026.
And yes, in my view sizing up the September retail sales report and factoring in the lessons in the September consumer price index and PPI reports, I continue to see Costco ($COST) taking consumer wallet share as we head into the year-end holiday season.
Position: TheStreet Pro is long COST.
