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Retail Sales, Goldman Sachs Rock the Pre-Markets

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Friday, October 15, 2021

Another big day for economic prints come in with pre-market levels already higher than yesterday’s close. We’re now on a clear upward trajectory for the week after starting off Monday sliding deep into the red. Currently, the Dow is up almost +200 points, the Nasdaq +52 and the S&P 500 +20 points. This follows gains on Thursday that brought the indexes up between 1.5-1.75% for the regular-day trading session.

Retail Sales for September swung to a big positive this morning, +0.7% from an expected -0.2%. This is actually down from the upwardly revised +0.9% from the previous month, and breaks the recent cycle of “up big one month, down bigger the next.” Subtracting volatile month-over month autos sales, we see this figure bump up to +0.8%, indicating the recent spike in motor vehicles sales may have ebbed. Ex-autos and gas, we’re back to +0.7%.

The Import Price Index, also for September, came in 10 basis points light of expectations to +0.4%, but this is a positive swing from the previous month’s -0.3%. The lion’s share of this boost came from the Energy sector, where petroleum and natural gas prices grew +3.7% from a -3.0% decline in August. Non-fuel imports were unchanged last month. Year over year, import prices are up a strong +9.2%.

Also, a new Empire State Manufacturing Index for October is out this morning, reaching +19.8, which is below the expected 26.5 and the previous month’s slightly revised 34.3. This productivity metric for New York State has been ping-ponging higher and lower since this past summer, but the good news here is that we’re well off the cycle lows we saw, which bottomed out in January of this year, +3.5.

The Goldman Sachs Group, Inc. (GS - Free Report) is up +2.5% this morning on a blowout Q3 earnings number. The Wall Street major investment bank made $14.93 per share, way up from the $9.78 expected and the $9.68 per share reported in the year-ago quarter. Revenues grew $13.6 billion for the quarter, +26% year over year. Even in a Q3 earnings season that has brought strong earnings numbers (including JPMorgan, which missed on revenues), no one has yet done as well as Goldman Sachs.

Investment Banking was the biggest gainer in the quarter: $3.7 billion, as compared to $2.9 billion expected. Fixed Income was a strong $2.5 billion, and Equities were $3.1 billion. Goldman has posted a nice string of earnings beats, now eight quarters in a row. The company has only posted three misses in the past five years. Going into the earnings report, Goldman had a Zacks Rank #3 (Hold) with a Value-Growth-Momentum score of A.

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