CORE PPI IS GETTING HIGH THANK THE TARIFF RISE

📈🔥Producer Prices Just Shocked the Fed — What That Means for You🔥📈

• 🛠 PPI (Producer Price Index) in July = +0.9% MoM 😳 (forecast was only +0.2%) — biggest jump since Feb!

• 📆 YoY = +3.3% — highest since Feb again.

• 📦 Core PPI (no food, energy, trade) = +0.6% MoM (biggest since Mar 2022) → also +3.3% YoY.

🧐 Why It Matters

• PPI = what businesses pay for stuff they sell. Higher PPI often → higher CPI later, because companies pass costs to consumers.

• Tariffs + import costs are squeezing margins 💸 — companies can’t eat it forever, so they raise prices on us.

• Tuesday’s CPI report already showed core inflation at a 6-month high (3.1% YoY).

🏦 Fed & Markets

• Fed wants 2% inflation. We’re still way above.

• This report gives Powell a headache right before his Aug 22 Jackson Hole speech.

• Markets still think rate cuts are coming in September → 95% chance of 0.25% cut, but the odds of a big 0.50% cut dropped.

• Stocks dipped after the report 📉.

📊 Translation for Young Investors

• Short-term: Could mean more volatility in stocks, especially rate-sensitive sectors like tech & real estate.

• Medium-term: If companies pass on costs, expect higher grocery bills, clothes, services.

• Long-term: Fed might cut rates slower than markets want → slower growth but maybe healthier economy later.

💡 Pro Tip: Inflation surprises like this make dividend stocks, pricing-power companies, and inflation-protected bonds look more attractive.

🖥️ Cisco (CSCO) — “Meh beat, cautious vibe”

• Earnings vs. estimates: Fiscal Q4 results came in roughly in line/slightly ahead on EPS and revenue, but the focus was on tempered guidance as enterprises digest last year’s big AI/Networking buys.

• Stock reaction: Muted to down as investors cared more about the outlook than the backward beat.

• What’s next: Watch orders and AI-data-center switching demand reacceleration into FY26.

• Trend check (last few yrs): Solid dividend tech with slow-to-mid growth; big 2023–24 order boom now normalizing.

• Street take: Mostly Hold; upside if orders re-accelerate.

• Quick fundamentals (ballpark): P/E ~13–15x, Div yield ~3%+, Net cash-ish, FCF strong, Op margin high-20s.

• Big holders: Vanguard, BlackRock.

🚜 Deere (DE) — “Good ops, tough cycle”

• Earnings vs. estimates: Q3 key metrics were mixed; ag cycle is late-stage with farmer sentiment soft.

• Stock reaction: Choppy/soft, reflecting cautious guidance and ag downcycle worries.

• What’s next: Precision ag & recurring software rev are the long game; near-term depends on crop prices/credit.

• Trend check: Multi-year winner post-2020; now cycling down from peak demand.

• Street take: Hold; value crowd hunting a bottom.

• Quick fundamentals: P/E ~12–14x, FCF robust through cycle, Div ~1–2%, Debt manageable vs. captive finance book.

• Big holders: Vanguard, BlackRock.

🐲 JD.com (JD) — “Beat & bounce”

• Earnings vs. estimates: Revenue beat on Q2 as e-commerce stabilized and logistics held up. Profit halves amid food delivery war.

• Stock reaction: Up, relief on top-line and margin discipline.

• What’s next: Focus on consumer demand recovery in China and competition vs. PDD & Alibaba.

• Trend check: 2022–23 pressured; 2024–25 focus on profitable growth.

• Street take: Hold to Moderate Buy; valuation still inexpensive vs. growth peers.

• Quick fundamentals: P/S low (~0.4–0.6x), margins slim but improving, Net cash strong.

• Big holders: Prosus (historically in China tech), Vanguard/BlackRock among ADR holders.