Stocks rise as investors waking up to more good news on falling U.S. gasoline prices and producer price inflation. But should investors really count on prices continuing to fall from here? For one thing, war continues to rage in Ukraine, fueling Europe’s energy crisis and winter is coming.

Jefferies strategists say the Fed is probably also “far from declaring victory over inflation,” say Jefferies. One takeaway from that 8.5% July CPI reading is that “the risk of an overtightening in U.S. financial conditions has been removed,’ said Sean Darby.

Jefferies’ U.S. financial conditions index has “turned from its extreme,” and they are now taking a long, or bullish stance on an early cyclical basket over defensives. “The drop in gasoline prices, long-term rates and CPI is excellent news for the global consumer.”

"Never in history has global consumer confidence numbers been so ubiquitously bad," Darby says. Producer prices fell 0.5% in July on the heels of a 1% gain in the prior month. AAA data showed gasoline prices dropping below $4 per gallon for the first time in months.

Weekly jobless claims rose by 14,000. Disney shares are surging after announcing its all-stock deal for Redbox Entertainment. The top-searched tickers on MarketWatch as of 6 a.m. Eastern were Apple, Tesla and GameStop.
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