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Coffee With Greta: CPI As Expected, Bank Stocks Rebound


DJIA Futures: +259 (+0.8%)

SPX Futures: +38 (+1.0%)

NASDAQ Futures: +120 (+1.0%)

Good morning friends!

Futures are jumping as traders digest new inflation data and bank stocks rebound. 

Let’s get right to it!

February CPI In-Line With Expectations

Inflation pressures slowed as expected in February. 

The Bureau of Labor Statistics’ consumer price index rose 0.4% monthly and 6% year over year. 

That was in-line with economists’ expectations and down from 0.5% monthly and 6.4% annually in January. 

The core CPI rose 0.5% monthly and 5.5% annually. 

That was slightly higher than economists’ expectations for 0.4% monthly but as expected annually. 

Following the recent turmoil in the banking sector, CME Group’s FedWatch Tool shows 79% of traders expecting a 25 basis point rate hike at next week’s Fed meeting.

The market is also pricing that hike in as the last one of the year.

Regional Bank Stocks Rebound

Shares of regional banks are rebounding today after plummeting over the past few sessions in the wake of the SVB and Signature Bank (SBNY) collapse.

First Republic Bank (FRC) shares are surging 56.9% in premarket trade after losing 61.8% on Monday.

Western Alliance Bancorp (WAL) shares are also jumping 40.9% after Wells Fargo analysts reiterated their overweight rating on the stock. 

The SPDR S&P Regional Banking ETF (KRE) is up 8.5% ahead of the open after tumbling 12.3% on Monday for its biggest one-day loss since March 2020.

United Airlines Q1 Profit Warning

United Airlines (UAL) shares are falling 4.6% ahead of the open after issuing a profit warning for the first quarter. 

The airline said it expects an adjusts quarterly loss of between $0.60 to $1 per share this quarter. 

That’s down from its previous forecast for earnings between $0.50 and $1 per share. 

United blamed that adjusted outlook on weaker demand growth and higher fuel costs this quarter.

In a securities filing, the company said, “While all months of 2023 are expected to produce unit revenue significantly above the corresponding months in 2019, the Company is observing new seasonal demand patterns, with lower-demand months such as January and February 2023 growing less than higher-demand months.”

Ride-Share Companies Rally On CA Court Decision

Uber (UBER), Lyft (LYFT), and DoorDash (DASH) shares are all rallying ahead of the open after a California appeals court ruled the companies can continue treating their drivers as independent contractors.

UBER is up 7.1%, with LYFT up 7.2%, and DASH rising 8.5%. 

The ruling overturned a previously ruling that required the companies to treat drivers as employees and provide benefits. 

The decision is likely to be appealed in the California Supreme Court.

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