Hot PPI & Subprime Squeeze

Good morning. We were set to start the day with some positive momentum following yesterday's reversal and fresh M&A activity, but when the PPI and the NY Empire State Index were released, all bullish bets were quickly called off. The PPI came in hotter than expected and the NY Empire State Index plunged to the lowest reading since May 2005. If you like higher inflation and further evidence of a slowing economy, then you're going to love this morning's data.

Along with a short-squeeze developing in the subprime area, premarket gainers are LEND, JOBS, AIXG, ENER, ELON, PBY, MDRX, ARMHY, ESLR, HOKU, ASTI, AAUK, FSLR, NUAN and SPWR. Premarket losers are HIBB, IOTN, JUPM, IMOS, TRID, HOTT, NOVL, AUDC, and TEVA.

At 12:PM we have the Philadelphia Fed Survey and, along with options expiration tomorrow, the CPI. The bulls made a valiant effort by defending the prior lows yesterday and produced a sizeable and timely reversal. Let's see how we open and whether the bulls can keep the pressure on in spite of the headlines. Have a great day!