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Markets Flat on Stubbornly Strong CPI; ABNB Up Big on Q4 Results
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Markets closed flat on St. Valentine’s Day 2023, taking a higher-than-expected Consumer Price Index (CPI) report ahead of the opening bell in stride. In fact, an initial bullishness greeted early trading on the strong January CPI, as it does portend a strong overall economy with year-over-year headline — the “Inflation Rate” — at +6.4% and +5.6% on core. Both of these metrics were higher than anticipated.
In an otherwise fairly quiet session, momentum shifted downward by midday before recovering. We looked as if we may test intraday highs by the closing bell, but it was not to be. The Dow, which had sunk -418 points at its session low, finished -137 points or -0.40%. The S&P 500 came in -0.03% on the day. The tech-heavy Nasdaq, led by strength in Tesla (TSLA - Free Report) and NVIDIA (NVDA - Free Report) , rose +65 points, +0.55%, while the small-cap Russell 2000 came in +0.15%.
So much for washing our hands of the inflation problem, at least as of January. The trajectory we’d been on the past half a year — with 4 of 6 months having shed a half-point or more on headline CPI year over year — may have made some observers downright hopeful that we’d have +2% inflation somewhere in view toward the end of 2023. Today’s tallies look more stubbornly high than that, although there is always a change the Fed’s higher interest rates for longer will have a lagging effect and start pulling inflation back at desired levels in subsequent months.
After Tuesday’s close, Airbnb (ABNB - Free Report) released Q4 earnings data which far outshone expectations, especially on the bottom line: earnings of 48 cents per share nearly doubled the 27 cents in the Zacks consensus, 6x the $0.08 per share registered in the year-ago quarter. Revenues grew +24% year over year to $1.90 billion, ahead of the $1.87 billion analysts were looking for. This marks the seventh straight earnings beat for Airbnb.
Guidance was also good for next quarter, especially on the sales side: expectations are now for the innovative “stays and experiences” company to bring in between $1.75-1.82 billion for Q1, easily surpassing the $1.68 billion in Zacks projections. Adjusted EBITDA was flat in the quarter and Gross Booking Value was softer than expectations, but the company’s Average Daily Rate grew in Q4. Shares are up a robust +9.5% in late trading, and an explosive +42% just since the start of the year.
Wednesday brings us the highest volume of new economic prints, with Retail Sales and Industrial Production/Capacity Utilization figures for January, along with a new Empire State survey and NAHB Homebuilders Index for February. Projections are for healthier monthly reads on each one of these metrics, which would present the same conundrum we experienced with CPI today: the overall economy is staying healthy, but we’re not having an easy time winding down inflation metrics.
Image: Bigstock
Markets Flat on Stubbornly Strong CPI; ABNB Up Big on Q4 Results
Markets closed flat on St. Valentine’s Day 2023, taking a higher-than-expected Consumer Price Index (CPI) report ahead of the opening bell in stride. In fact, an initial bullishness greeted early trading on the strong January CPI, as it does portend a strong overall economy with year-over-year headline — the “Inflation Rate” — at +6.4% and +5.6% on core. Both of these metrics were higher than anticipated.
In an otherwise fairly quiet session, momentum shifted downward by midday before recovering. We looked as if we may test intraday highs by the closing bell, but it was not to be. The Dow, which had sunk -418 points at its session low, finished -137 points or -0.40%. The S&P 500 came in -0.03% on the day. The tech-heavy Nasdaq, led by strength in Tesla (TSLA - Free Report) and NVIDIA (NVDA - Free Report) , rose +65 points, +0.55%, while the small-cap Russell 2000 came in +0.15%.
So much for washing our hands of the inflation problem, at least as of January. The trajectory we’d been on the past half a year — with 4 of 6 months having shed a half-point or more on headline CPI year over year — may have made some observers downright hopeful that we’d have +2% inflation somewhere in view toward the end of 2023. Today’s tallies look more stubbornly high than that, although there is always a change the Fed’s higher interest rates for longer will have a lagging effect and start pulling inflation back at desired levels in subsequent months.
After Tuesday’s close, Airbnb (ABNB - Free Report) released Q4 earnings data which far outshone expectations, especially on the bottom line: earnings of 48 cents per share nearly doubled the 27 cents in the Zacks consensus, 6x the $0.08 per share registered in the year-ago quarter. Revenues grew +24% year over year to $1.90 billion, ahead of the $1.87 billion analysts were looking for. This marks the seventh straight earnings beat for Airbnb.
Guidance was also good for next quarter, especially on the sales side: expectations are now for the innovative “stays and experiences” company to bring in between $1.75-1.82 billion for Q1, easily surpassing the $1.68 billion in Zacks projections. Adjusted EBITDA was flat in the quarter and Gross Booking Value was softer than expectations, but the company’s Average Daily Rate grew in Q4. Shares are up a robust +9.5% in late trading, and an explosive +42% just since the start of the year.
Wednesday brings us the highest volume of new economic prints, with Retail Sales and Industrial Production/Capacity Utilization figures for January, along with a new Empire State survey and NAHB Homebuilders Index for February. Projections are for healthier monthly reads on each one of these metrics, which would present the same conundrum we experienced with CPI today: the overall economy is staying healthy, but we’re not having an easy time winding down inflation metrics.
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