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Pre-market futures are mixed ahead of the final trading session of the week. Major indexes are up, thanks to a robust day on the markets Wednesday, with the exception of the small-cap Russell 2000, which is down -1% from this time a week ago. The Dow is currently +20 points, the S&P 500 is flat and the Nasdaq is -35 points.
PPI: Wholesale Inflation 0.0%, +1.8% Year over Year
The sister report to yesterday’s Consumer Price Index (CPI), which details retail pricing and inflation, is this morning’s Producer Price Index (PPI), the wholesale pricing and inflation print for September. Headline month over month came in at 0.0% for the fourth time this year, -20 basis points (bps) lower than the previous month, and 10 bps below estimates.
These are final demand numbers, by the way, so they are fairly set in stone. Core month-over-month PPI (subtracting volatile food and energy prices) came in as-expected at +0.2%, down 10 bps month over month. Ex-food, energy and trade, we see +0.1% — the lowest print since June.
Year-over-year PPI has been the low water mark for inflation levels going back several months, and today shows a +1.8% for September, up 10 bps points from August but sub-2% (the Fed’s preferred level of overall inflation) and exponentially lower than the supply-chain nightmare of early 2022, when PPI year over year reached +11.7% — the highest in 40 years.
Core PPI year over year rose to its highest level since early summer to +2.8%, but still exponentially lower than the +9.7% we were seeing in March of ’22. Ex-food, energy and trade came in at +3.2%, 10 bps lower month over month but still above the sub-3% levels we had earlier in 2024.
All of this is to say that, like CPI yesterday, we see some resistance to obtaining solid +2.0% inflation. Whether metrics are remaining flat or ticking up over the near term, it’s only the year-over-year headline number that has sunk beneath 2%. For sure this is not a crash landing, and it has yet to be determined that it’s a for-sure soft landing. We’re still in the plane. But almost nobody is nervous.
Q3 Earnings Season Begins: JPM, WFC
Two of the biggest Wall Street banks are out with Q3 earnings numbers this morning, unofficially kicking off Q3 earnings season. JPMorgan Chase ((JPM - Free Report) and Wells Fargo ((WFC - Free Report) , both Zacks Rank #3 (Hold)-rated stocks coming into their reports, outperformed on their respective bottom lines.
JPMorgan earned $4.37 per share last quarter, ahead of the $4.02 in the Zacks consensus and the $4.33 per share posted in the year-ago quarter, for a positive surprise of +8.7%. Revenues were also stronger than anticipated at $42.65 billion, +3.87% ahead of analyst expectations. Net Interest Income (NII) levels surprised to the upside in the quarter. Shares are flat on the news, but +25% year to date.
Wells Fargo brought an even bigger positive surprise, reporting $1.52 per share versus $1.27 in the Zacks consensus, for a +19.7% surprise. Revenues, on the other hand, were a smidge below expectations to $20.37 billion. But shares are up ahead of the bell by +3%, adding to the bank’s +17% gains year to date.
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Producer Price Index Unchanged in September
Pre-market futures are mixed ahead of the final trading session of the week. Major indexes are up, thanks to a robust day on the markets Wednesday, with the exception of the small-cap Russell 2000, which is down -1% from this time a week ago. The Dow is currently +20 points, the S&P 500 is flat and the Nasdaq is -35 points.
PPI: Wholesale Inflation 0.0%, +1.8% Year over Year
The sister report to yesterday’s Consumer Price Index (CPI), which details retail pricing and inflation, is this morning’s Producer Price Index (PPI), the wholesale pricing and inflation print for September. Headline month over month came in at 0.0% for the fourth time this year, -20 basis points (bps) lower than the previous month, and 10 bps below estimates.
These are final demand numbers, by the way, so they are fairly set in stone. Core month-over-month PPI (subtracting volatile food and energy prices) came in as-expected at +0.2%, down 10 bps month over month. Ex-food, energy and trade, we see +0.1% — the lowest print since June.
Year-over-year PPI has been the low water mark for inflation levels going back several months, and today shows a +1.8% for September, up 10 bps points from August but sub-2% (the Fed’s preferred level of overall inflation) and exponentially lower than the supply-chain nightmare of early 2022, when PPI year over year reached +11.7% — the highest in 40 years.
Core PPI year over year rose to its highest level since early summer to +2.8%, but still exponentially lower than the +9.7% we were seeing in March of ’22. Ex-food, energy and trade came in at +3.2%, 10 bps lower month over month but still above the sub-3% levels we had earlier in 2024.
All of this is to say that, like CPI yesterday, we see some resistance to obtaining solid +2.0% inflation. Whether metrics are remaining flat or ticking up over the near term, it’s only the year-over-year headline number that has sunk beneath 2%. For sure this is not a crash landing, and it has yet to be determined that it’s a for-sure soft landing. We’re still in the plane. But almost nobody is nervous.
Q3 Earnings Season Begins: JPM, WFC
Two of the biggest Wall Street banks are out with Q3 earnings numbers this morning, unofficially kicking off Q3 earnings season. JPMorgan Chase ((JPM - Free Report) and Wells Fargo ((WFC - Free Report) , both Zacks Rank #3 (Hold)-rated stocks coming into their reports, outperformed on their respective bottom lines.
JPMorgan earned $4.37 per share last quarter, ahead of the $4.02 in the Zacks consensus and the $4.33 per share posted in the year-ago quarter, for a positive surprise of +8.7%. Revenues were also stronger than anticipated at $42.65 billion, +3.87% ahead of analyst expectations. Net Interest Income (NII) levels surprised to the upside in the quarter. Shares are flat on the news, but +25% year to date.
Wells Fargo brought an even bigger positive surprise, reporting $1.52 per share versus $1.27 in the Zacks consensus, for a +19.7% surprise. Revenues, on the other hand, were a smidge below expectations to $20.37 billion. But shares are up ahead of the bell by +3%, adding to the bank’s +17% gains year to date.