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Coffee With Greta: Inflation Cools, Rally Continues

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DJIA Futures: +245 (+0.7%)

SPX Futures: +19 (+0.4%)

NASDAQ Futures: +59 (+0.4%)

Good morning friends!

Futures are higher as the rally continues after the release of more cooling inflation data. 

Let’s get right to it!

Fed’s Preferred Inflation Gauge

The Fed’s preferred inflation gauge cooled as expected in October. 

The PCE price index was flat monthly and rose 3% year over year. 

That was down from the 3.4% annual pace in September. 

Energy prices dropped 2.6% as food prices rose 0.2%> 

The core PCE price index rose 0.2% monthly and 3.5% year over year, as expected. 

That was a slowdown from the 3.7% annual pace in September and the lowest increase since Spring 2021.

The report also showed personal spending rose 0.2% and incomes were up 0.2% as well, both in line with expectations. 

Weekly Jobless Claims Tick Higher

Weekly jobless claims rose less than expected last week. 

The Labor Department reported 218,000 Americans filed initial claims for unemployment benefits. 

That was up by 7,000 from the week before but lower than expectations for 220,000. 

Continuing claims rose by 86,000 to 1.927 million in the week ending November 18.

That’s the highest number of continuing claims since November 2021.

Ford Reinstates Guidance

Ford (F) shares are up 1.2% ahead of the open after reinstating its 2023 guidance this morning. 

The automaker originally pulled its forecast last month due to unknown impacts from the labor strike by the United Auto Workers Union.

The new guidance calls for adjusted EBIT of $10 billion to $10.5 billion this year vs $11 billion and $12 billion previously. 

Ford expects to have a full-year adjusted cash flow of $5 billion to $5.5 billion vs $6.5 billion to $7 billion previously. 

The company said its new labor agreement with UAW is expected to cost over $8.8 billion over the life of the contract, through April 2028.

By 2028, the UAW is expected to add $900 in costs per assembled vehicle. 

Salesforce Jumps On Earnings Beat

Salesforce (CRM) shares are rallying 9% in premarket trade after beating Q3 expectations. 

Here’s how the software company’s results compared to analysts’ estimates: 

  • Adjusted EPS: $2.11 vs $2.06 expected
  • Revenue: $8.72 billion as expected

Revenue rose 11% year over year.

Salesforce expects revenue to increase 10% in Q4 to between $9.18 billion and $9.23 billion vs $9.21 billion analysts were expecting.  

The company also said it now sees operating cash flow growth of 33% in 2024 vs 30% previously.  

In Case You Missed It

  • The Fed’s Beige Book on Tuesday showed both the U.S. economy and inflation slowed in October and November. Six of the 12 regional Fed banks in the survey reported slight declines in economic activity. The report said, “Demand for labor continued to ease, as most districts reported flat to modest increases in overall employment.” Slowing economic growth and labor demand helped ease inflation. The Beige Book said price increases “largely moderated” across the country and “most districts expect moderate price increases to continue into next year.”

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