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CPI +0.4% Hotter on Nondurables; Q3 Earnings for JPM, DAL, BLK

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Wednesday, October 13, 2021

We finally see a pickup in data this morning, after weeks of a slower news cycle between earnings seasons and fewer economic reports. That all changes as of now, with key Q3 earnings hitting the tape along with a new Consumer Price Index (CPI) for September. This CPI read is an important metric for reading inflation in the market, which is something market participants and the Federal Reserve take very seriously.

September CPI came in at +0.4%, 10 basis points hotter than analysts’ consensus. This follows the previous month’s +0.3% and totals a new record-high 274.14 points. Subtracting volatile food and energy prices, the “core” read came in at +0.2%, 10 basis points lower than expected but higher than the +0.1%. This points to most of the heat in CPI data coming from the volatile (“transitory,” Fed Chair Jay Powell might say) food and energy markets.

Year-over-year gives us the Inflation Rate, which is 5.40% for September; the Core Inflation Rate is 4.0% as of last month. This even gives more highlights to the price strength in non-durables compared to overall. Energy is a strong +1.3% over this period, while “real” earnings come in at +0.8%. Month over month, food is +0.9%, including a +1.2% increase in “in-home” food prices, meaning grocery stores. Utilities were up +2.7% and New Vehicles were +1.2%.

JPMorgan & Chase (JPM - Free Report) released a mixed Q3 earnings report this morning, beating estimates on the bottom line by 25% to $3.74 per share, while narrowly missing on revenues: $29.65 billion, -0.27% from the Zacks consensus. JPMorgan saw a strong quarter overall despite headwinds from the Delta variant; credit and debit card use was up nicely in the quarter. Shares are up 0.5% on the news. JPM is +31.4% year to date. For more on JPM’s earnings, click here.

Delta Air Lines (DAL - Free Report) topped expectations for both earnings and sales: 30 cents per share doubled the 15 cents analysts were expecting, on $9.15 billion in revenues, beating the $8.37 billion anticipated. However, shares are selling off -1.4% in today’s pre-market on weaker guidance for Q4:  while the U.S.’s biggest airline expectes to fly 80% of 2019 capacity, rising fuel costs are expected to hit profitability. For more on DAL’s earnings, click here.

Investment management firm BlackRock (BLK - Free Report) also outperformed on both top and bottom lines this morning, with earnings coming in at $10.95 per share on $5.1 billion in Q3 revenues. These passed the $9.63 per share and $5.01 billion, respectively, in the Zacks consensus. Assets under management are at $9.5 trillion, though operating margins slipped slightly year over year to 38.3%. Shares of BLK have tracked the S&P 500 year to date, +17.6%, and are up +1.4% in today’s pre-market.

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