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Plenty to chew on with breakfast today: Weekly Jobless Claims, June Producer Price Index, major Q2 earnings reports and a new paper suggesting Lehman Brothers collapsed unnecessarily.
For the June Producer Price Index (PPI), we see a rise of 0.5%, higher than the 0.3% expected. This follows an unrevised 0.4% growth in May; subtracting food & energy prices we also see a read of 0.4%. This nearly 1% growth in pricing power from domestic producers over the past 2 months demonstrates real strength, is the highest read since May 2015 and constitutes clear good news.
Weekly Jobless Claims hit 254K for the second week in a row (last week’s 254K is also unched). Continuing claims rose slightly from last week to 2.14+ million. This weekly claims read is beneath the 4-week moving average, and thus represents positive labor market news, as well.
We also see results from some of the biggest companies trading on the S&P 500: JPMorgan Chase (JPM - Free Report) and Delta Air Lines (DAL - Free Report) . Both companies beat earnings expectations, though revenues slipped a bit year over year. JPMorgan topped expectations in its Q2 on a surprise raise in revenues and lower expenses. Delta missed sales numbers slightly for Q2, so its overall report was mixed.
Looking ahead, both JPMorgan and Delta addressed Brexit concerns for Q3 and beyond. JPMorgan’s CFO actually said the bank experienced a small positive trading bump immediately following the Brexit vote, though it was mentioned a Q3 seasonal slowdown might also be expected. Delta has cut back its capacity by 6% on U.S.-U.K. flights for its winter schedule, as a direct reaction to Brexit fallout concerns.
In a new paper released by esteemed economist Laurence Ball, it was suggested Lehman Brothers need not have collapsed in the fall of 2008 (the failure of Lehman ushered in the housing/mortgage-based collapse that led to the Great Recession of 2008-09), and was allowed to fail for political reasons. Citing GW Bush’s Treasury Secretary Hank Paulson, among others, Ball said he could find no evidence government officials looked into ways to rescue the beleaguered investment bank in real time.
With so much overall positive sentiment feeding the market, it’s no surprise to see futures up in today’s pre-market. The Dow is currently +150, Nasdaq +32 and S&P +17. Not too bad, considering the rally that has already taken place much of the week, including crossing all-time index highs.
Mark Vickery Senior Editor
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Plenty to Chew On with Breakfast This Morning
Thursday, July 14, 2016
Plenty to chew on with breakfast today: Weekly Jobless Claims, June Producer Price Index, major Q2 earnings reports and a new paper suggesting Lehman Brothers collapsed unnecessarily.
For the June Producer Price Index (PPI), we see a rise of 0.5%, higher than the 0.3% expected. This follows an unrevised 0.4% growth in May; subtracting food & energy prices we also see a read of 0.4%. This nearly 1% growth in pricing power from domestic producers over the past 2 months demonstrates real strength, is the highest read since May 2015 and constitutes clear good news.
Weekly Jobless Claims hit 254K for the second week in a row (last week’s 254K is also unched). Continuing claims rose slightly from last week to 2.14+ million. This weekly claims read is beneath the 4-week moving average, and thus represents positive labor market news, as well.
We also see results from some of the biggest companies trading on the S&P 500: JPMorgan Chase (JPM - Free Report) and Delta Air Lines (DAL - Free Report) . Both companies beat earnings expectations, though revenues slipped a bit year over year. JPMorgan topped expectations in its Q2 on a surprise raise in revenues and lower expenses. Delta missed sales numbers slightly for Q2, so its overall report was mixed.
Looking ahead, both JPMorgan and Delta addressed Brexit concerns for Q3 and beyond. JPMorgan’s CFO actually said the bank experienced a small positive trading bump immediately following the Brexit vote, though it was mentioned a Q3 seasonal slowdown might also be expected. Delta has cut back its capacity by 6% on U.S.-U.K. flights for its winter schedule, as a direct reaction to Brexit fallout concerns.
In a new paper released by esteemed economist Laurence Ball, it was suggested Lehman Brothers need not have collapsed in the fall of 2008 (the failure of Lehman ushered in the housing/mortgage-based collapse that led to the Great Recession of 2008-09), and was allowed to fail for political reasons. Citing GW Bush’s Treasury Secretary Hank Paulson, among others, Ball said he could find no evidence government officials looked into ways to rescue the beleaguered investment bank in real time.
With so much overall positive sentiment feeding the market, it’s no surprise to see futures up in today’s pre-market. The Dow is currently +150, Nasdaq +32 and S&P +17. Not too bad, considering the rally that has already taken place much of the week, including crossing all-time index highs.
Mark Vickery
Senior Editor