We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Market indexes took this morning’s CPI numbers for January and ran. Unfortunately, the direction was inverse to the CPI report: down. The Dow, while coming off its intra-day low of -667 points, finished -526 or -1.47%. The Nasdaq fell -304 points, -2.10%; the S&P 500 was -1.81% and the small-cap Russell 2000 was -1.55% on the day.
Everything had been going swimmingly. Then, following Consumer Price Index (CPI) numbers reported higher than expected for January and the highest year-over-year jump in 40 years, we heard voting Fed President James Bullard from St Louis call for interest rates to come up +1% by July, in order to sop up inflation. A 100-basis-point rise by mid-summer would equate to a 25-basis-point raise in March, May, June and July meetings… but that’s not what investors are playing currently.
Right now, a 50-basis-point Fed raise upon the cessation of the asset purchase program winding down currently is expected at the Fed’s March 15-16 meeting. Keep in mind there is a Producer Price Index (PPI) report for January due out next week — as well as another CPI print ahead of the next Fed meeting — so it’s a bit of a stretch to call this a done deal. But that’s how markets are trading at this point.
The 10-year bond yield did not miss the opportunity to jump over the 2% mark on this news, which is the highest since August 2019 — well before anyone in the world was considering a global economy-crushing pandemic to swoop in and change everything’s trajectory. The 2-year is currently at +1.61%, which does help flatten the curve. Fortunately, it is still a ways from any inversion point, which would again be a bearish market signal.
Expedia (EXPE - Free Report) posted mixed Q4 results after today’s close, with earnings of $1.06 per share tromping the Zacks consensus 97 cents expected on sales of $2.28 billion, which missed the $2.36 billion anticipated. Comparing revenues with Expedia’s Q4 2019, the last truly comparable quarter prior to the pandemic, they are -17% on -24% Q4 gross bookings.
Still, it’s the third positive surprise in the past four quarters, with its VRBO unit showing strength in its domestic travel initiatives. The Zacks Rank #3 (Hold) company after the earnings announcement is up +6%, after a slight gain during a weak day in overall regular-day trading.
On-line real estate marketplace Zillow Group (ZG - Free Report) shares are +17% on this afternoon’s better-than-expected loss on the bottom line — -42 cents versus -$1.24 per share expected — on higher-than-expected sales in the quarter: $3.88 billion versus $3.09 billion. This is the first bottom-line beat for Zillow in the past four quarters, and its +17% boost only partially fills in a -76% share price over the last full year. Questions or comments about this article and/or its author? Click here>>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
CPI Effects Linger: Shares Down -1.5 to 2%
Market indexes took this morning’s CPI numbers for January and ran. Unfortunately, the direction was inverse to the CPI report: down. The Dow, while coming off its intra-day low of -667 points, finished -526 or -1.47%. The Nasdaq fell -304 points, -2.10%; the S&P 500 was -1.81% and the small-cap Russell 2000 was -1.55% on the day.
Everything had been going swimmingly. Then, following Consumer Price Index (CPI) numbers reported higher than expected for January and the highest year-over-year jump in 40 years, we heard voting Fed President James Bullard from St Louis call for interest rates to come up +1% by July, in order to sop up inflation. A 100-basis-point rise by mid-summer would equate to a 25-basis-point raise in March, May, June and July meetings… but that’s not what investors are playing currently.
Right now, a 50-basis-point Fed raise upon the cessation of the asset purchase program winding down currently is expected at the Fed’s March 15-16 meeting. Keep in mind there is a Producer Price Index (PPI) report for January due out next week — as well as another CPI print ahead of the next Fed meeting — so it’s a bit of a stretch to call this a done deal. But that’s how markets are trading at this point.
The 10-year bond yield did not miss the opportunity to jump over the 2% mark on this news, which is the highest since August 2019 — well before anyone in the world was considering a global economy-crushing pandemic to swoop in and change everything’s trajectory. The 2-year is currently at +1.61%, which does help flatten the curve. Fortunately, it is still a ways from any inversion point, which would again be a bearish market signal.
Expedia (EXPE - Free Report) posted mixed Q4 results after today’s close, with earnings of $1.06 per share tromping the Zacks consensus 97 cents expected on sales of $2.28 billion, which missed the $2.36 billion anticipated. Comparing revenues with Expedia’s Q4 2019, the last truly comparable quarter prior to the pandemic, they are -17% on -24% Q4 gross bookings.
Still, it’s the third positive surprise in the past four quarters, with its VRBO unit showing strength in its domestic travel initiatives. The Zacks Rank #3 (Hold) company after the earnings announcement is up +6%, after a slight gain during a weak day in overall regular-day trading.
On-line real estate marketplace Zillow Group (ZG - Free Report) shares are +17% on this afternoon’s better-than-expected loss on the bottom line — -42 cents versus -$1.24 per share expected — on higher-than-expected sales in the quarter: $3.88 billion versus $3.09 billion. This is the first bottom-line beat for Zillow in the past four quarters, and its +17% boost only partially fills in a -76% share price over the last full year.
Questions or comments about this article and/or its author? Click here>>