GAME PLAN REVEALED: PPI, Retail Sales & Market Technicals

In this morning’s GAME PLAN show, Gareth Soloway, Chief Market Strategist at VerifiedInvesting.com, dissected fresh PPI and retail sales data, updated his technical outlook on equities and bonds, and reviewed key earnings and commodity setups. Below, we expand on the themes he introduced—providing historical context, psychological insights, and deeper analysis into market mechanics—to guide readers who didn’t tune in live and inspire them to catch the next show.

Producer Prices Show Deflationary Trends

The Producer Price Index (PPI) surprised to the downside in April, printing a month-over-month decline of 0.5% versus expectations for a 2.0% rise. Year-over-year, PPI came in at 2.44% against forecasts of 2.5%.
“Lower inflation on the producer side and the consumer side means there’s a better chance the Fed will be able to cut rates at an earlier date,” Gareth noted.

Historical Context
Producer price deflation is rare outside of deep recessions. In 2008–2009, PPI fell nearly 10% Y/Y, foreshadowing the credit-driven collapse. Today’s modest decline underscores weak pricing power among manufacturers and distributors. It also aligns with the Federal Reserve’s goal of 2% inflation, suggesting less monetary tightening ahead—if consumers continue spending.

Psychology of Deflationary Risks
Deflationary signals can spark fear-driven hoarding: businesses delay purchases expecting cheaper inputs, while consumers postpone buying. Tracking producer prices is therefore crucial, as prolonged declines can exacerbate economic slowdowns.

Consumer Spending Struggles Beneath the Surface

On the surface, retail sales rose 0.1% in April—beating the flat reading economists predicted. Yet core retail sales (ex-autos) plunged 0.2% versus a consensus +0.3%.
“With auto tariffs removed, consumers front-ran the price hike by buying cars early,” Gareth explained, “but strip out autos, and spending is weaker than expected.”

Deep Dive: Auto Distortion
Auto sales frequently distort headline retail figures. In 2018–2019, similar tariff-driven rushes boosted April sales before sliding back in May. This pattern warns that core consumption—services, discretionary goods—may be faltering.

Implications for Inflation and Growth
Weaker core spending dampens upward pressure on consumer prices, reinforcing the PPI data. However, if consumers retrench further, GDP growth may slow below trend, heightening recession risks. The Fed must balance these cross-currents when setting policy.

Equity Market Technicals and Resistance Levels

Following a 22% S&P 500 rally in five weeks, markets flirt with critical overhead supply. On the intraday S&P futures chart, the index dipped about 20 points after the PPI release but remains within Friday’s range. On the daily chart, prices are pressing the last line of defense before a potential retest of the 2024 double top.

“Anytime you see a rally like this, it’s rare outside of sharp bear-market bounces—think March 2020,” Gareth observed.

Key Levels to Watch

Short-term trendline support: Near 4,300 on the S&P futures.
Double-top resistance zone: Around 4,500, where supply from last spring may reassert.
Overbought readings: RSI levels exceeding 70 historically lead to 3–5% pullbacks in bull-market rallies.

Balancing Odds and Discipline
Historical studies show that right after stretch moves like this, markets pause or retrace. Traders should await clear breakouts or breakdowns rather than chasing the trend—applying strict levels and position sizing to control risk.

Fixed Income: 10-Year Yield and Fed Implications

The U.S. 10-year Treasury yield spent the past week near 4.45% before retreating modestly on today’s PPI data. From May 1 to present, yields effectively mirrored a 50 bp rate hike in market-implied Fed funds.

“The question is: does the Fed believe these lower inflation prints, or will they wait for confirmation?” Gareth asked, pointing to upcoming Fed speakers and meeting minutes.

Historical Precedent
In 1995, the Fed paused after a brief disinflation scare only to resume hikes later when labor markets remained tight. Today, falling PPI and weak retail sales could give the Fed cover to hold rates, but strong job data or wage growth might force further tightening.

Strategic Takeaway
Monitor the 10-year yield at 4.20% support. A break below signals market conviction in disinflation; a rebound above 4.60% reopens fears of sticky inflation and equity pressure.

Earnings and Event-Driven Setups: Cisco, CoreWeave, and UNH

Several notable earnings reports drove idiosyncratic moves this week:

Cisco Systems (CSCO)

After pressing a post-earnings high near $63.50, Cisco stalled against its prior pivot at $65.50—a level marking a potential double top. Until that supply zone is cleared, risk-reward favors a fade back toward $61.

CoreWeave (CRVW)

Shares surged then collapsed on heavy AI-infrastructure spending commitments. Trading flat around $67.60, CoreWeave offers no clear edge until it either rallies above yesterday’s high for a day-trade short or drops below its overnight low for a countertrend setup.

UnitedHealth Group (UNH)

The DOJ’s fraud probe sent UNH tumbling from $600 to $283 pre-market—a textbook panic gap. Weeks-old trendline support near $280 may offer a tactical long entry, but the fundamental overhang warrants caution until regulatory clarity emerges.

Merger Arbitrage: Dick’s Sporting Goods & Foot Locker

Dick’s swooped in to buy Foot Locker, pinning both stocks near the implied offer price.
“Buyouts rarely give you volatility to trade—prices chop sideways around the deal tag,” Gareth reminded viewers.

Cryptocurrency and Commodities: Bitcoin, Ethereum, Gold, and Energy

Bitcoin: Bullish Consolidation

Bitcoin drifts sideways around $101,000–$104,000. As long as daily closes hold above $100,700, the structure resembles a bullish range that often resolves to the upside. A weekly close beneath that level would invalidate the pattern.

Ethereum: Trendline Short Zone

Ethereum’s advance found resistance at an up-sloping trendline near $2,900. If ETH revisits that line, it may provide a shorting opportunity—echoing previous “retrace to the scene of the crime” failures.

Gold: Brewing Bull Flag

Gold paused after rallying to all-time highs, carving out a bull-flag consolidation.
“Simple is almost better in the market—pure trendlines and clear patterns,” Gareth said. A breakout above the flag pole’s high sets the stage for a renewed advance.

Oil and Natural Gas: Bear Flags and Base Building

Crude formed a bear flag after its recent drop, favoring lower prices if support at $70 breaks. Natural gas, down modestly, consolidated near its three-day low. Patience remains key: enter on confirmed moves rather than anticipating reversals.

Conclusion: Navigating Uncertainty with Discipline

Today’s disinflation signals in PPI and the pullback in core retail sales suggest mixed readings for Fed policy. Equity markets sit at pivotal technical levels, while bonds, cryptos, and commodities each tell a unique story of consolidation and potential breakout. As Gareth emphasized, “It’s all about probability-based trading—strict levels, position sizing, and emotional control.” By combining multi-factor technical analysis with historical perspective and disciplined risk management, investors can navigate the current uncertainty across asset classes.