Deflationary Trends Dominate Data Drop; PPI Checks in a -0.5% MOM, Lowest in 5 Years; Walmart Warns on Revenue Miss

Wednesday produced another split decision on equity markets with the Dow and NYSE Composite lower and the NASDAQ and S&P higher, albeit only slightly.

Traders were possibly waiting on Thursday's pre-market data dump and earnings from Walmart (WMT).

Of the multiple releases at 8:30 am ET, the most stunning was April PPI, which registered a -0.5% month-on-month, the lowest such reading since April 2020, at the onset of the spamdemic.

As Money Daily has been inferring for months, the chorus of cheerleaders for Fed rate cuts are likely going to be singing the wrong tune. Rather than inflation and recession harming the economy, it's dis-inflation or deflation that will emerge as the main threat later this year, if not already in play.

A negative on the PPI and stalled out CPI for April signal that between DOGE efforts in Washington, deportations, tariff trauma, and OPEC+ production cuts, prices for everything from Pop-tarts to retail gasoline are falling, pretty much a natural effect after years of official Washington's mismanagement.

Along with the PPI showing up harshly deflationary, April Retail Sales were flat, rising just 0.1% over the month. If consumers aren't expanding their spending - they're broke, using credit cards to buy food - there's no chance for any inflation, either at the producer level, as pricing power evaporates, or at the consumer point.

Initial jobless claims came in the same as last week, with 229,000 applying for benefits.

The NY Fed Manufacturing Index fell again, to -9.2 from -8.1 last reading. The Philly Fed was wildly improved, at -4, from -26.4 in the prior period.

The market awaits April readings on Industrial Production and Capacity Utilization.

Walmart beat its earnings forecast but missed on revenue in the first quarter for the first time in five years. The company blamed tariffs (which haven't been fully implemented yet) as the cause for the revenue miss.

WTI crude oil is down sharply after the EIA announced a "surprise" inventory build. The price of a barrel of light, sweet crude is hovering around $61 after closing out yesterday in New York at $63.15.

With all the confusion associated with Trump making multiple deals in the Middle East and data showing something along the lines of stag-deflation, stock futures are sharply lower. Dow futures, -142, NASDAQ futures, -102, S&P futures, -21.

At the Close, Wednesday, May 14, 2025:
Dow: 42,051.06, -89.37 (-0.21%)
NASDAQ: 19,146.81, +136.72 (+0.72%)
S&P 500: 5,892.58, +6.03 (+0.10%)
NYSE Composite: 19,628.46, -94.91 (-0.48%)