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Coffee With Greta: Has Inflation Peaked?


DJIA Futures: +46 (+0.1%)

SPX Futures: +13 (+0.3%)

NASDAQ Futures: +57 (+0.5%)

Good morning friends!

Futures are higher following more better-than-expected inflation data. 

Let’s get right to it!

Wholesale Inflation Tumbles

Wholesale inflation pressures tumbled more than expected in December. 

The Bureau of Labor Statistics’ producer price index fell 0.5% monthly vs expectations for a 0.1% drop. 

The PPI rose 6.2% year over year, down from 7.3% in November. 

Excluding food, energy, and trade services, the core PPI rose 0.1% monthly and 4.6% annually. 

That was down from the 0.3% monthly and 4.9% annual gain in November. 

Retail Sales Drop Sharply

U.S. retail sales fell more than expected in December as consumers spent less on cars, gas, and furniture. 

The Census Bureau reported retail sales dropped 1.1% last month to $677.1 billion. 

That was steeper than economists’ expectations for a 1% decline. 

High inflation and interest rates put pressure on shoppers during the key holiday shopping season.

On an annual basis, retail sales rose 6% as shoppers continued to pay higher prices. 

Gas stations saw the largest decline in Decmeber as prices fell, down 4.6% from November. 

Furniture store sales fell 2.5%, car sales were down 1.2%, electronics and appliances fell 1.1%. 

The only retailers to see a slight gain were building material retailers which rose 0.3% and sporting goods stores which were up 0.1%.

Core retail sales, which exclude vehicles and gas, fell 0.7% monthly and were up 7.2% year over year. 

United Airlines Jumps After Reporting Q4 Profit

United Airlines (UAL) shares are up 4.0% ahead of the open after sharply beating Q4 expectations. 

Here’s how the carrier’s results compared to analysts’ estimates: 

  • Adjusted EPS: $2.46 vs $2.11 expected
  • Revenue: $12.4 billion vs $12.23 billion expected

The airline’s guidance also topped expectations. 

United expects Q1 EPS between $0.50 and $1, well above consensus estimates of $0.31. 

For the full year, the airline is anticipating adjusted EPS between $10 and $12 vs analysts’ estimates of $6.84. 

Party City Files For Bankruptcy

Party City (PRTY) shares have been halted after rallying 10.6% in premarket trade following the company’s Chapter 11 bankruptcy filing.

In a filing with the SEC on Tuesday, the retailer said it had struck an agreement to reduce its debt.

Party City had received a $150 million debtor-in-possession loan to continue operations while it reorganizes. 

The company expects to complete its restructuring in Q2.  

Mortgage Demand Jumps Amid Lower Rates

Mortgage application volume jumped at the start of the year as rates fell to the lowest level since September. 

The Mortgage Bankers Association reported total application volume rose nearly 28% last week from the week before. 

Refinance applications jumped 34% but were still 81% lower year over year. 

Purchase applications rose 25% weekly and were 35% lower than the same week a year ago. 

The jump came as the average 30-year fixed contract rate fell to 6.23% from 6.42% the week before. 

Market experts are anticipating an increase in mortgage activity over the next few months as we enter the traditionally busy spring buying season.

Homebuilder Sentiment Expected To Fall

Homebuilder sentiment is expected to have fallen further this month as the housing market continues to be squeezed by high mortgage rates. 

The National Association of Homebuilders releases its January sentiment index at 10:00 a.m. ET today. 

That survey is expected to fall to 30 from 31 in December. 

Sentiment fell for the 12th straight month in December, hitting the lowest level since June 2012. 

In Case You Missed It

Peloton (PTON) shares rallied 2.7% on Tuesday after hiring a new chief marketing officer. The exercise bike maker hired former Twitter CMO Leslie Berland to fill that position. The former CMO left Peloton in September. Berland said she is “thrilled” to join Peloton at this “unique moment in its transformation journey.”

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