Earnings, data, and rates drive broad-based rally
The stock market is having a great day, bolstered by positive earnings news, lower rates, and relatively encouraging economic data. The S&P 500 (+1.6%), Nasdaq Composite (+1.7%), Dow Jones Industrial Average (+1.5%), and Russell 2000 (+1.4%) are up between 1.4-1.7%.  All 11 S&P 500 sectors are trading higher, advancing issues have a 4:1 advantage over declining issues at the NYSE, and growth/value stocks are rising together. The information technology (+2.0%) and materials (+2.1%) sectors lead with 2% gains while the energy sector (+0.8%) is the only sector up less than 1.0%. Growth stocks are benefiting from the 10-yr yield trading lower by four basis points to 1.51%, which is being driven by a peak-inflation sentiment following the Producer Price Index (PPI) report for September. Producer prices remained extremely high on a year-over-year basis, but core PPI was up just 0.2% m/m (Briefing.com consensus +0.5%). Value stocks are benefiting from better-than-expected Q3 earnings results and from a lower-than-expected count in weekly jobless claims. Initial claims decreased by 36,000 to 293,000 (Briefing.com consensus 332,000), which was the lowest level since the start of the pandemic. As for earnings, UnitedHealth (UNH 422.19, +18.63, +4.6%), Bank of America (BAC 44.54, +1.39, +3.2%), Morgan Stanley (MS 100.47, +1.91, +1.9%), Walgreens Boots Alliance (WBA 50.51, +3.24, +6.9%), and Taiwan Semi (TSM 113.01, +3.02, +2.7%) are trading sharply higher following their reports. Wells Fargo (WFC 45.06, -0.99, -2.1%), U.S. Bancorp (USB 59.49, -1.97, -3.2%), and Citigroup (C 70.36, +0.10, +0.1%), however, aren't getting rewarded for beating expectations. Taiwan Semi also reported upbeat Q4 revenue guidance, which appears to be having a positive influence on the Philadelphia Semiconductor Index (+2.9%). Separately, the S&P 500 is approaching the underside of its 50-day moving average (4436), which acted as resistance earlier this month. This might be a level worth watching today. Reviewing today's economic data:The Producer Price Index for September was a bit softer than expected. The index for final demand increased 0.5% month-over-month (Briefing.com consensus +0.6%) and the index for final demand, less foods and energy, increased 0.2% (Briefing.com consensus +0.5%). On a year-over-year basis, the index for final demand was up 8.6%, versus 8.3% in August. That is the largest advance since the 12-month data were first calculated in November 2010.The key takeaway from the report is in the Treasury market's initial response, which is muted and indicative once again that market participants are sniffing peak inflation. The 10-yr note yield is down two basis points to 1.53% (which is where it was just prior to the release).The latest weekly initial claims report was the best since March 14, 2020. Initial claims for the week ending October 9 decreased by 36,000 to 293,000 (Briefing.com consensus 332,000). Continuing claims for the week ending October 2 decreased by 134,000 to 2.593 million, which was also the lowest since March 14, 2020.The key takeaway from the report is that the claims figures are moving in the manner and direction they should be moving given the recurring refrain of labor shortages and the recurring reports showing that there are more than ten million job openings.