The market continued its positive trend as the Dow gained another 21 points and again closed at a record high of 21,553.
With the anticipation of the Consumer Price Index (CPI) data tomorrow morning, today we got a little taste with the Producer Price Index (PPI). June showed a 0.1% increase, and an overall PPI inflation rate of about 2% in the last year, which is right at the Fed’s target. Due to this economic strength Fed Chair, Janet Yellin has been talking about rate hikes and the reduction of the Fed portfolio, and having seen this data Brian Wesbury agrees that “there should be little doubt that balance sheet unwinding and further rate hikes are warranted”. Employment continues to see promising numbers as new unemployment claims fell by 3,000 last week, and continuing unemployment claims fell by 20,000.
The latest version of the Repeal and Replace health care bill was released today. The bill is mostly the same with some minor provisions such as being able to pay health care premiums with your HSA money. There are still concerns that the ultra-sick and elderly could have increased premiums, and of course a lot of that will depend on how many people will become uninsured as a result of the new policy. It seems to be mixed results as to whether this bill will have enough support to pass, and some Congressional members may be waiting for the independent Congressional Budget Office (CBO) to run their projections. This will most likely not be the final bill, regardless, as there is still much more “political maneuvering” to be done with the addition of future bill amendments and such.
Oil continues to recover as it toppled $46 a barrel today, while gold prices have fallen off a bit to 1,218 over the comfort in economic factors.