PPI & Retail Sales

Good morning. We're in rally mode following benign inflation and better-than expected retail sales data. The total PPI fell a much larger than expected -1.6% (consensus -0.5%) while the more closely watched core rate dropped -0.9% (consensus +0.1%). Also, retail sales fell for the second straight month -0.2% (consensus -0.4%) while sales, ex-autos, fell -0.4% (consensus -0.3%). Bottom line - while retail sales could have been stronger, they're not bad and there's nothing here to increase concerns over inflation.

Turning toward stocks, investors are focused on reports out from Wal-Mart (WMT) and Home Depot (HD) among a few others. Stocks trading higher in premarket include EFUT, IONA, TIVO, CWTR, GORX, EXFO, GGXY, CTSH, RVSN, MOVI, ORCT, PEIX, HSOA, CMED, GOLF, CHNR, ASML, AEOS, KNOT, NICE, and FFIV. Premarket decliners are FOSL, BRLC, IRIS, IPII, CNTF, MAMA, DSTI, EGLE, REGN, and SPLS.

Like yesterday, I'll be hunting for a couple of quick trades. We have the business inventories report due at 10:AM but it probably won't be a major market-mover and William Poole is scheduled to speak around noon. Have a terrific Tuesday!