Core PPI fell in July for the first time since early 2017, registering a 0.1% decline versus a 0.1% consensus gain. The annual rate was 2.1%, also the lowest since 2017.

Stripping out trade services as well, the index fell (-0.1%) for the first time since 2015. The annual rate was 1.7% versus +2.1% in June.

Adding in food and energy, PPI gained 0.2% MoM, even though oil prices fell in July. To complicate things, the cost of goods rose 0.4% in July.

Bottom line, these data are not reflective of a strong economy, let alone the “greatest economy in the history of America.”  This is an economy which is struggling despite historically low interest rates.

continued for members…

Futures have been all over the map, but are currently showing a 15-pt decline.They were off over 20 points after the close yesterday, but have seen a nice bounce courtesy of CL and VIX.  CL has recovered some of its losses from Jul 31, but it’s really just backtesting the white channel .236 line as well as the broken fan line from the Dec lows.VIX is threatening to break below its SMA200 — which it did briefly yesterday to ensure a strong close. But, it’s really just backtesting the broken red channel top.USDJPY is still hanging by a thread.Though the strength of this week’s bounce suggests the cycle lows might already be in place, our yield curve model continues to sound the alarm.For those playing this bounce, I would fade it here and now.  Yes, there’s a chance VIX could be hammered down to a 14 handle again. Trump could call up Xi and beg forgiveness from his good friend. Bullard could go running down Wall Street  screaming “QE forever!”  So use reasonable stops.

The rest of today’s charts:

EURUSD continues to slide sideways with a bias toward the upside. Trading it or DXY continues to be an exercise in futility as the swings are miniscule. RB is showing a nice bounce, but will soon run into its SMA200. More importantly, it needs to show lower prices this month simply to maintain the pressure for lower interest rates.The 10Y appears to be positioning for the next leg lower to 15.54.

And, gold is hanging in there.  I would remain long as long as it’s able to hold 1495.One nice little fear monitor, the SPY Nov 240 puts, got down to an even more attractive level at the close yesterday.