Coffee With Greta: Stocks Fall Flat On Hot CPI
DJIA Futures: +39 (+0.1%)
SPX Futures: +5 (+0.1%)
NASDAQ Futures: +8 (+0.1%)
Good morning friends!
Futures are flat after the January CPI came in hotter than expected.
Let’s get right to it!
CPI Runs Hot
U.S. inflation pressures rose more than expected at the start of 2023.
The Bureau of Labor Statistics’ consumer price index jumped 0.5% in January and 6.4% year over year.
That was higher than economists’ expectations for a 0.4% monthly and 6.2% annual gain.
But it was still cooler than the 6.5% annual gain in December.
Rising shelter costs drove that gain, up 0.7% monthly and 7.9% year over year.
Consumers also paid higher prices for food and energy.
Grocery prices were up 0.4% monthly and 11.3% annually while gas prices rose 2.4% monthly and 1.5% year over year.
The core CPI, which excludes food and energy, rose 0.4% monthly and 5.6% annually.
That was also hotter than expectations for 0.3% monthly and 5.5% annually.
The higher prices translated into a loss in real pay for workers.
Average hourly earnings fell 0.2% monthly and 1.8% year over year when adjusted for inflation.
Higher Prices Boost Coca-Cola Earnings
Coca-Cola (KO) shares are up 0.3% ahead of the open after topping Q4 expectations.
Here’s how the beverage giant’s results compared to analysts’ expectations:
- Adjusted EPS: $0.45, as expected
- Revenue: $10.13 billion vs $10.02 billion expected
Coke said its unit case volume fell 1% in Q4 as higher prices hurt demand.
Prices were up 12% year over year and the company sold a more expensive mix of drinks during the quarter.
The company forecast comparable revenue growth of 3% to 5% in 2023 and EPS growth of 4% to 5%.
The revenue outlook was in line with expectations while the earnings outlook was better than expected.
Palantir Reports First Profitable Quarter
Palantir Technologies (PLTR) shares are surging 15% in premarket trade after beating Q4 expectations and reporting its first profitable quarter ever.
Here’s how the software company’s results compared to analysts’ expectations:
- Adjusted EPS: $0.04 vs $0.03 expected
- Revenue: $509 million vs $502 million expected
Revenue jumped 18% year over year with U.S. commercial revenue up 12%.
Palantir grew from 80 U.S. commercial customers a year ago to 143 in Q4.
The CEO said, “With this result, Palantir is profitable. This is a significant moment for us and our supporters.”
The company forecast Q1 revenue between $503 million and $507 million and full-year revenue between $2.18 billion and $2.23 billion.
Marriott Beats Q4 Expectations, Issues Strong Guidance
Marriott (MAR) shares up 0.5% ahead of the open after beating Q4 expectations on the top and bottom line and issuing strong guidance.
Here’s how the hotel chain’s results compared to analysts’ expectations:
- Adjusted EPS: $1.96 vs $1.83 expected
- Revenue: $5.9 billion vs $5.37 billion expected
Revenue per available room was up 5% compared to pre-pandemic levels and jumped 29% year over year.
That increase was driven by an 11% jump in the average daily room rate in the U.S. and Canada.
Marriott’s CEO said, “As we look ahead, while concerns about the macroeconomic environment persist around the world, booking trends remain robust and we have significant momentum in our business.”
The company forecast Q1 EPS of $1.82 to $1.88 vs $1.65 expected.
For the full year, Marriott forecast a profit of $7.23 to $7.91 per share vs $7.44 expected.
In Case You Missed It
- Americans’ short-term inflation expectations remained stable at the start of 2023. The New York Fed’s released its January survey of consumer expectations on Monday. Respondents said they believe inflation will be at 5% 1-year from now, unchanged from December. Consumers expect inflation to be at 2.7% 3-years from now vs 2.9% in December. But the 5-year projection ticked higher to 2.5% from 2.4%.
- Ford (F) shares jumped 2.8% on Monday after the company unveiled plans to build a new EV battery plant. The automaker announced it will spend $3.5 billion to build that plant in Michigan with a Chinese supplier, CATL. The plant is expected to create 2,500 jobs and begin production in 2026. Ford will manufacture lithium iron phosphate batteries at the facility and says it will be the first U.S. automaker to make those batteries in the U.S.