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PPI at Historic +11.2% Year Over Year; JPM Mixed, DAL Beats
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Wednesday, April 13, 2022
Following yesterday’s Consumer Price Index (CPI) numbers yesterday morning, which posted highs not seen in 40 years, this morning we hear the other shoe dropping: the Producer Price Index (PPI) for March came in at +11.2% on headline year over year. Recall yesterday’s CPI headline was +8.5% year over year.
Month over month, PPI reached +1.4% — 30 basis points higher than expected, and a half-point higher than the upwardly revised +0.9% the previous month. Ex-food & energy, the “core” print, equalled its all-time high at +1.0%, while ex-food, energy and trade came in a smidge below at +0.9%. These are all historically high numbers.
What’s more, considering PPI figures inform future CPI numbers to a certain extent, these historic highs strongly suggest we are not yet out of the woods regarding high inflation. Whereas we saw in yesterday’s CPI figures was that it was mostly taken up by volatile food and gas prices; today’s PPI numbers suggest these high (and highly volatile) prices may have already seeped into stickier aspects of economic inflation.
We see crude oil and food prices +13% from a year ago, aggravated by the Russian invasion of Ukraine six weeks ago, which followed the lingering effects of the Omicron variant of Covid. Now we’re seeing massive lockdowns in China due to a new(?) variant of the pandemic, harming global productivity issues beyond the war in Ukraine. Thus, our supply-based inflation predicament is a worldwide phenomenon, and it will take efforts on a global scale to roll it back.
Speaking of Ukraine, JPMorgan Chase (JPM - Free Report) reported only its third earnings miss in the past five years for Q1 2022 this morning, partly on a $524 million write-down based on market dislocations from Russia, as the West puts forth a coordinated effort to pull the reins on the oil-producing giant. JPMorgan reported $2.63 per share on $31.59 billion in quarterly revenues, which beat expectations on the top line.
Further, JPMorgan stated that the war in Ukraine is making forecasts for dealmaking “impossible,” even as CEO Jamie Dimon sees strength in the economy near-term. The stock is trading down -3% in the pre-market — off its morning lows, but shares are still -18% year to date. For more on JPM’s earnings, click here.
Delta Air Lines (DAL - Free Report) outperformed expectations in its Q1 earnings report this morning, with a loss of -$1.23 per share a four-cent improvement from the Zacks consensus, and well above the -$3.55 per share reported in the year-ago quarter. Easy comps in the airline industry are expected; sales in the quarter of $9.35 billion was notably ahead of the $9.01 billion analysts have ben expecting and now finally higher than pre-pandemic levels. For more on DAL’s earnings, click here.
Pre-market futures have slipped a tad on this morning’s PPI numbers, but not by much: the Dow went from -25 points to -35, the S&P 500 from +5 points to -3, and the Nasdaq has managed to stay in the green thus far: +24 points to +14. However, keep in mind lots of the selling off on inflation data happened before the fact: the Dow is -0.5% over the past five trading sessions, the S&P is -1.6% and the Nasdaq is -3.75%. Questions or comments about this article and/or its author? Click here>>
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PPI at Historic +11.2% Year Over Year; JPM Mixed, DAL Beats
Wednesday, April 13, 2022
Following yesterday’s Consumer Price Index (CPI) numbers yesterday morning, which posted highs not seen in 40 years, this morning we hear the other shoe dropping: the Producer Price Index (PPI) for March came in at +11.2% on headline year over year. Recall yesterday’s CPI headline was +8.5% year over year.
Month over month, PPI reached +1.4% — 30 basis points higher than expected, and a half-point higher than the upwardly revised +0.9% the previous month. Ex-food & energy, the “core” print, equalled its all-time high at +1.0%, while ex-food, energy and trade came in a smidge below at +0.9%. These are all historically high numbers.
What’s more, considering PPI figures inform future CPI numbers to a certain extent, these historic highs strongly suggest we are not yet out of the woods regarding high inflation. Whereas we saw in yesterday’s CPI figures was that it was mostly taken up by volatile food and gas prices; today’s PPI numbers suggest these high (and highly volatile) prices may have already seeped into stickier aspects of economic inflation.
We see crude oil and food prices +13% from a year ago, aggravated by the Russian invasion of Ukraine six weeks ago, which followed the lingering effects of the Omicron variant of Covid. Now we’re seeing massive lockdowns in China due to a new(?) variant of the pandemic, harming global productivity issues beyond the war in Ukraine. Thus, our supply-based inflation predicament is a worldwide phenomenon, and it will take efforts on a global scale to roll it back.
Speaking of Ukraine, JPMorgan Chase (JPM - Free Report) reported only its third earnings miss in the past five years for Q1 2022 this morning, partly on a $524 million write-down based on market dislocations from Russia, as the West puts forth a coordinated effort to pull the reins on the oil-producing giant. JPMorgan reported $2.63 per share on $31.59 billion in quarterly revenues, which beat expectations on the top line.
Further, JPMorgan stated that the war in Ukraine is making forecasts for dealmaking “impossible,” even as CEO Jamie Dimon sees strength in the economy near-term. The stock is trading down -3% in the pre-market — off its morning lows, but shares are still -18% year to date. For more on JPM’s earnings, click here.
Delta Air Lines (DAL - Free Report) outperformed expectations in its Q1 earnings report this morning, with a loss of -$1.23 per share a four-cent improvement from the Zacks consensus, and well above the -$3.55 per share reported in the year-ago quarter. Easy comps in the airline industry are expected; sales in the quarter of $9.35 billion was notably ahead of the $9.01 billion analysts have ben expecting and now finally higher than pre-pandemic levels. For more on DAL’s earnings, click here.
Pre-market futures have slipped a tad on this morning’s PPI numbers, but not by much: the Dow went from -25 points to -35, the S&P 500 from +5 points to -3, and the Nasdaq has managed to stay in the green thus far: +24 points to +14. However, keep in mind lots of the selling off on inflation data happened before the fact: the Dow is -0.5% over the past five trading sessions, the S&P is -1.6% and the Nasdaq is -3.75%.
Questions or comments about this article and/or its author? Click here>>