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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Susan G who wrote (22656)	8/11/1999 1:21:00 AM
From: Berney	Respond to of 99985

Thanks Susan. That's a day I want to be flat! :o)

To: Susan G who wrote (22656)	8/11/1999 10:37:00 AM
From: Les H	Respond to of 99985

US DATA PREVIEW: ENERGY PRICES SEEN CHARGING UP JULY PPI By Kevin Kastner WASHINGTON (MktNews) - A rebound in energy prices is expected to lift the July U.S. Producer Price Index after a soft reading in June, but inflation remains tame, as other major components show little cause for concern, analysts surveyed by Market News International said. The Labor Department is scheduled to release the July PPI report at 8:30 a.m. EDT Friday. In a Market News International survey of 19 economists, the median forecast for July PPI was for a 0.3% increase, compared with a 0.1% decline in June. Forecasts ranged from up 0.2% to up 0.5%. Forecasts for core PPI, which excludes food and energy, centered on a 0.1% rise after June's 0.2% decline, within a range of unchanged to up 0.4%. Analysts expect that energy prices could rise as much as 4% in the July report, with gasoline alone up as much as 10%. Should the energy numbers be this strong, they would add 0.2% to the overall index, accounting for almost all of the expected gain. "Red hot oil prices will impact the PPI again this month, although with not quite the drama seen in April," said Avery Shenfeld, economist at CIBC Oppenheimer, referring to an energy related 0.5% increase that month. Oil and natural gas are also expected to post small increases in the July report, but it appears that energy inflation has not yet infected other components in the index, analysts said. "Although the best is now almost certainly over, the inflation outlook going forward still remains friendly on several counts. A wild card is oil, but with spot crude nearly double early 1999's level and every penny adding to the incentive for OPEC cheating, oil prices are hopefully either near, or have reached their peak," Shenfeld added. Food prices, on the other hand, appear to have declined in July, as the USDA's index of prices received fell off 4.0% in the month, the largest decline since February 1994. Analysts expected food prices to fall around 0.3% in July on lower meat and grain prices. Excluding food and energy, core prices are expected to reflect the benign price conditions seen in other reports, analysts said. After falling 0.2% in June, there is an expectation of some increase in the core index, led by higher prescription prices and a small rebound in motor vehicle prices resulting from the changeover to new models. Computer prices are expected to slide more in July after a soft reading in June, and capital equipment prices are projected to be relatively unchanged along with tobacco prices. "Of greater concern to the market lately has been the definitive recovery in intermediate producer prices," said Jay Feldman and Mike Cloherty, economists at Credit-Suisse First Boston, citing gains in building materials and import prices. The "pipeline" components are getting an obvious boost from crude oil prices, but metals and paper products could also add to inflation at the earlier stages of production, analysts said.