PPI report suggests hardest part of inflation battle is won, according to Comerica
The January producer price index report, a measure of inflation, come in higher than expected on Thursday, sending equities lower.
It may signal though that the worst is behind the U.S. in terms of bringing inflation down, according to John Lynch, chief investment officer for Comerica Wealth Management.
“Today’s wholesale inflation data, when coupled with the CPI report, suggests that the easy battles against price pressures have been won,” Lynch wrote Thursday. “We believe the move from ~9.0% to ~6.0% will prove to be much less challenging than the journey from ~6.0% to ~3.0%.”
Still, because of the reports, the Federal Reserve will remain steadfast and keep policy tighter for longer than equity markets have been pricing in since October, he said.
“We look for higher rates to pressure P/E multiples and we continue to position portfolios for value over growth, with active strategies likely to outperform passive indexes in the months and quarters ahead,” he said.
—Carmen Reinicke
NVIDIA shares are fully valued at current levels, says Deutsche Bank
Deutsche Bank reiterated its hold rating on NVIDIA shares, saying that secular themes overshadow the AI computing company’s muted fundamentals.
Analyst Ross Seymore said that NVIDIA’s growth outlook remains unclear — particularly its fast-growing AI GPU accelerator business — given the recent cautious guides from INTC and AMD.
“Overall, clearly NVDA shares have benefited from renewed enthusiasm surrounding AI compute,” Seymore wrote in a Thursday note. “Nevertheless, we believe the shares remain fully valued at current levels.”
The firm set its price target for the company at $170, implying a 25.3% downside from Wednesday’s closing price.
NVIDIA stock
Piper Sandler upgrades Baker Hughes
Piper Sandler upgraded Baker Hughes to overweight from neutral, citing the improving visibility within the company’s…
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