Coffee With Greta: Disinflation Trend
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DJIA Futures: +70 (+0.2%)
SPX Futures:+17 (+0.4%)
NASDAQ Futures: +114 (+0.7%)
Good morning friends!
Futures are higher as more data shows the disinflationary trend continuing and Q2 earnings begin to trickle in.
Let’s get right to it!
Wholesale Inflation Cooler Than Expected
Wholesale inflation pressures were cooler than expected in June.
The Bureau of Labor Statistics’ producer price index rose 0.1% monthly and 0.1% year over year.
That was better than expectations for 0.2% monthly and 0.4% annually.
It was the lowest headline number since August 2020.
The core PPI also cooled more than expected, rising 0.1% monthly and 2.4% annually.
Economists were expecting core PPI to rise 0.2% monthly and 2.6% annually.
This data is good news for consumer inflation as producer prices are a leading indicator for consumer price trends.
Weekly Jobless Claims Slide
Weekly jobless claims fell unexpectedly last week in another sign the labor market is maintaining strength.
The Labor Department reported 237,000 Americans filed initial claims for unemployment benefits.
That was down by 12,000 from the previous week and lower than expectations for claims to rise to 250,000.
But continuing claims rose unexpectedly in the week ending July 1, up by 9,000 to 1.729 million vs expectations for that number to be unchanged.
Delta Jumps On Record Earnings, Revenue
Delta Airlines (DAL) shares are up 3.8% ahead of the open after reporting record second quarter earnings and revenue.
Here’s how the airline’s results compared to analysts’ estimates:
- Adjusted EPS: $2.64 vs $2.40 expected
- Adjusted revenue: $14.61 billion vs $14.49 billion expected
International travel surged during the quarter with revenue from trans-Atlantic trips up more than 60% year over year.
Domestic revenue rose 8% while overall passenger revenue was up 21%.
Fuel costs tumbled 22% during the quarter which boosted the company’s bottom line.
Delta forecast Q3 earnings between $2.20 and $2.50 per share.
The company expects capacity to increase 16% this quarter and revenue to jump as much as 14% from a year ago.
Delta also hiked its full-year outlook, now expecting adjusted EPS of $6 to $7.
PepsiCo Up After Earnings Beat, Higher Guidance
PepsiCo (PEP) shares are rising 2.3% in premarket trade after beating Q2 expectations and hiking its full-year outlook.
Here’s how the beverage maker’s results compared to analysts’ estimates:
- Adjusted EPS: $2.09 vs $1.96 expected
- Revenue: $22.32 billion vs $21.73 billion expected
But sales volume dropped 3% in Pepsi’s food division and 1% in the beverage division as higher prices hurt demand.
The company still raised its outlook for the second consecutive quarter.
For 2023, Pepsi expects 10% organic revenue growth vs 8% previously.
The company also forecast core constant currency earnings growth of 12% vs 9% previously.
In Case You Missed It
- The Fed’s latest beige book shows economic growth continuing to slow across the country. The central bank released that report Wednesday afternoon. Five of the 12 Fed districts reported slight or modest growth, five reported flat growth, and two reported slight or modest declines. The report said labor markets are healthy with hiring more “targeting and selective”. Wage growth continued at a more moderate pace while price increases also slowed.