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Pre-markets are mixed ahead of today’s open. It’s the final trading day of the week, obviously, and also a week that has now brought significant economic information to bear on trading. This morning it’s the Producer Price Index (PPI) report for June, the wholesale inflation numbers following yesterday’s Consumer Price Index (CPI) retail inflation, which showed a proper cooling that will likely lead to a Fed rate cut in the next few months.
Today’s PPI numbers were not quite as accommodating. Headline PPI month over month came in at +0.2%, higher than the +0.1% expected and the previous month’s upwardly revised 0.0%. This is the highest monthly print since the +0.5% in April, back when fears began to emerge that inflation was not dimming as hoped so that the Fed might bring interest rates down. Year over year, this number blossoms to +2.6% from an upwardly revised +2.4% the previous month and +2.2% anticipated.
Core PPI strips out volatile food and energy prices. Here we see +0.4% month over month, higher than the +0.2% expected and the upwardly revised +0.3% the previous month. It’s also the highest since this past hot April’s +0.5%. Core year over year came in at +3.0% even, above the +2.5% projected and the revised +2.6% from the previous month. Ex-food, energy and trade month over month came in at 0.0% and year over year at +3.1%. Final Demand was +2.6%, the highest since March of this year.
These numbers, including yesterday’s, do change the playing field somewhat. However, not all news is good news, as we may have begun to celebrate yesterday (with a big uptick in small-cap stocks to the tune of +3 1/2% in Thursday’s regular session). PPI shows us that the price of good on the wholesale side are coming back up after months of behaving in-line with the Fed’s optimal inflation rate around +2%. Perhaps this is a forward indicator on inflation, meaning CPI numbers of the coming months will bump back up.
Market participants in today’s early session don’t agree with this. Futures ahead of this print were +60 points on the Dow, +2 on the S&P 500 and -13 points on the Nasdaq. Currently we are +71 on the Dow, +7 on the S&P and +22 points on the Nasdaq. Meaning market participants are not troubled by these hotter-than-expected wholesale inflation numbers. Further, there is no sign of “buyer’s remorse” from Thursday’s session’s exuberance.
JPMorgan Chase (JPM - Free Report) outperformed expectations this morning. Its Q2 earnings per share of $4.40 easily surpassed the Zacks consensus $4.19 by +5%, for its eighth-straight quarterly earnings beat. Revenues of $50.2 billion trounced expectations by +11.45%, and well ahead of the year-ago $41.31 billion reported. Shares are up moderately on the news, adding to their +22% gains year to date. For more on JPM’s earnings, click here.
Citigroup (C - Free Report) shares are trading up +3% in the early market. This follows its Q2 report, which beat estimates on both top and bottom lines: earnings of $1.52 per share topped the $1.40 expected, and revenues of $20.14 billion notched ahead of the $20.03 billion consensus. Investment banking revenue jumped +60% year over year (off fairly easy comps) on better bond trading and IPO activity. Shares are adding to their +23% gains, year to date.
Wells Fargo (WFC - Free Report) makes it a clean sweep on Q2 results for big banks this morning. Earnings of $1.33 per share beat the Zacks consensus by 6 cents and +8 cents year over year. Revenues of $20.69 billion posted a +2% beat for the quarter, and above the $20.53 billion posted in the year-ago quarter. However, a miss on net interest income projections has led to a -5% sell-off in today’s pre-market, subtracting some of the +22% gains year to date. For more on WFC’s earnings, click here. Questions or comments about this article and/or author? Click here>>
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PPI Swells Higher, Big Banks Beat Q2 Estimates
Friday, July 12th, 2024
Pre-markets are mixed ahead of today’s open. It’s the final trading day of the week, obviously, and also a week that has now brought significant economic information to bear on trading. This morning it’s the Producer Price Index (PPI) report for June, the wholesale inflation numbers following yesterday’s Consumer Price Index (CPI) retail inflation, which showed a proper cooling that will likely lead to a Fed rate cut in the next few months.
Today’s PPI numbers were not quite as accommodating. Headline PPI month over month came in at +0.2%, higher than the +0.1% expected and the previous month’s upwardly revised 0.0%. This is the highest monthly print since the +0.5% in April, back when fears began to emerge that inflation was not dimming as hoped so that the Fed might bring interest rates down. Year over year, this number blossoms to +2.6% from an upwardly revised +2.4% the previous month and +2.2% anticipated.
Core PPI strips out volatile food and energy prices. Here we see +0.4% month over month, higher than the +0.2% expected and the upwardly revised +0.3% the previous month. It’s also the highest since this past hot April’s +0.5%. Core year over year came in at +3.0% even, above the +2.5% projected and the revised +2.6% from the previous month. Ex-food, energy and trade month over month came in at 0.0% and year over year at +3.1%. Final Demand was +2.6%, the highest since March of this year.
These numbers, including yesterday’s, do change the playing field somewhat. However, not all news is good news, as we may have begun to celebrate yesterday (with a big uptick in small-cap stocks to the tune of +3 1/2% in Thursday’s regular session). PPI shows us that the price of good on the wholesale side are coming back up after months of behaving in-line with the Fed’s optimal inflation rate around +2%. Perhaps this is a forward indicator on inflation, meaning CPI numbers of the coming months will bump back up.
Market participants in today’s early session don’t agree with this. Futures ahead of this print were +60 points on the Dow, +2 on the S&P 500 and -13 points on the Nasdaq. Currently we are +71 on the Dow, +7 on the S&P and +22 points on the Nasdaq. Meaning market participants are not troubled by these hotter-than-expected wholesale inflation numbers. Further, there is no sign of “buyer’s remorse” from Thursday’s session’s exuberance.
JPMorgan Chase (JPM - Free Report) outperformed expectations this morning. Its Q2 earnings per share of $4.40 easily surpassed the Zacks consensus $4.19 by +5%, for its eighth-straight quarterly earnings beat. Revenues of $50.2 billion trounced expectations by +11.45%, and well ahead of the year-ago $41.31 billion reported. Shares are up moderately on the news, adding to their +22% gains year to date. For more on JPM’s earnings, click here.
Citigroup (C - Free Report) shares are trading up +3% in the early market. This follows its Q2 report, which beat estimates on both top and bottom lines: earnings of $1.52 per share topped the $1.40 expected, and revenues of $20.14 billion notched ahead of the $20.03 billion consensus. Investment banking revenue jumped +60% year over year (off fairly easy comps) on better bond trading and IPO activity. Shares are adding to their +23% gains, year to date.
Wells Fargo (WFC - Free Report) makes it a clean sweep on Q2 results for big banks this morning. Earnings of $1.33 per share beat the Zacks consensus by 6 cents and +8 cents year over year. Revenues of $20.69 billion posted a +2% beat for the quarter, and above the $20.53 billion posted in the year-ago quarter. However, a miss on net interest income projections has led to a -5% sell-off in today’s pre-market, subtracting some of the +22% gains year to date. For more on WFC’s earnings, click here.
Questions or comments about this article and/or author? Click here>>