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Pre-market indices are up rather strongly this morning, and even higher upon the release of Consumer Price Index (CPI) for July and Jobless Claims reports for the past couple weeks an hour ahead of today’s opening bell. In fact, pre-market futures spiked as a direct result of this data, especially the CPI. The Dow is currently +190 points (and now in positive territory over the past five trading days), the S&P 500 is +25 points and the Nasdaq +140.
CPI for July was spot-on with estimates on month-over-month headline at +0.2%, just as reported in the past couple months (the high of the past few years was +0.8% month over month, in April of 2021). Stripping out volatile food and energy prices, we’re still +0.2% for July, as it was originally reported in June. Year over year on headline, +3.2% is 20 basis points (bps) higher than the previous month’s +3.0% (which was the lowest monthly print since March 2021), but down 10 bps from the consensus estimate of +3.3%.
The main figure to emerge from monthly CPI data, however, is the year over year core. Here we see a subtle improvement to +4.7%, down 10 bps from June. Clearly, this is a ways off the optimum inflation rate the Fed would like to see of +2%, but when we look back to peak CPI core levels — September of last year came in at +6.6% — we can see a decisive downswing in this key inflation metric. Remember, this core read takes out volatile month-over-month price swings and gets at the “stickier” aspects of inflation.
Perhaps this is the reason for the pre-market spike this morning, as CPI data behaving as analysts had hoped will likely diminish the probability of another Fed rate hike when the monetary policy body decides on new interest rate levels six weeks from yesterday. Six weeks is a long time, and plenty of economic reports are due for release ahead of the next Fed decision — including another CPI print. But today’s report does some heavy lifting for economist, including those at the Fed, for understanding how inflation is trending.
Initial Jobless Claims rose to their highest levels since late June this morning, with +248K new claims posted for last week. This was well above the 231K expected and the unrevised 227K reported for the previous week. Continuing Claims, on the other hand, remain at historical lows: 1.684 million is lower than the downwardly revised 1.692 million reported for the previous week. This is off cycle lows of 1.679 million from the middle of last month, but we haven’t seen longer-term jobless claims over 1.8 million since the last week of April.
Ralph Lauren ((RL - Free Report) shares are down this morning, following moderate beats on both top and bottom lines in its fiscal Q1: earnings of $2.34 per share outpaced the $2.15 in the Zacks consensus and more than +15% year over year. Revenues of $1.50 billion surpassed the $1.48 billion expected, basically flat year over year. However, North America sales fell -10% from the year-ago quarter, and shares are down -4.8% on the news.
Zacks Rasnk #5 (Strong Sell) Six Flags ((SIX - Free Report) shares are also down somewhat in today’s pre-market session, following a -69% miss on its bottom line with earnings coming in at 25 cents per share. Revenues in the quarter of $443.7 million missed the Zacks consensus by -5.34%. However, shares had been -2.6% immediately after the release and are only -1.6% now; perhaps the overall positivity regarding the perceived end of interest rate hikes is currently floating all boats?
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Core CPI Inflation In Line With Estimates in July
Pre-market indices are up rather strongly this morning, and even higher upon the release of Consumer Price Index (CPI) for July and Jobless Claims reports for the past couple weeks an hour ahead of today’s opening bell. In fact, pre-market futures spiked as a direct result of this data, especially the CPI. The Dow is currently +190 points (and now in positive territory over the past five trading days), the S&P 500 is +25 points and the Nasdaq +140.
CPI for July was spot-on with estimates on month-over-month headline at +0.2%, just as reported in the past couple months (the high of the past few years was +0.8% month over month, in April of 2021). Stripping out volatile food and energy prices, we’re still +0.2% for July, as it was originally reported in June. Year over year on headline, +3.2% is 20 basis points (bps) higher than the previous month’s +3.0% (which was the lowest monthly print since March 2021), but down 10 bps from the consensus estimate of +3.3%.
The main figure to emerge from monthly CPI data, however, is the year over year core. Here we see a subtle improvement to +4.7%, down 10 bps from June. Clearly, this is a ways off the optimum inflation rate the Fed would like to see of +2%, but when we look back to peak CPI core levels — September of last year came in at +6.6% — we can see a decisive downswing in this key inflation metric. Remember, this core read takes out volatile month-over-month price swings and gets at the “stickier” aspects of inflation.
Perhaps this is the reason for the pre-market spike this morning, as CPI data behaving as analysts had hoped will likely diminish the probability of another Fed rate hike when the monetary policy body decides on new interest rate levels six weeks from yesterday. Six weeks is a long time, and plenty of economic reports are due for release ahead of the next Fed decision — including another CPI print. But today’s report does some heavy lifting for economist, including those at the Fed, for understanding how inflation is trending.
Initial Jobless Claims rose to their highest levels since late June this morning, with +248K new claims posted for last week. This was well above the 231K expected and the unrevised 227K reported for the previous week. Continuing Claims, on the other hand, remain at historical lows: 1.684 million is lower than the downwardly revised 1.692 million reported for the previous week. This is off cycle lows of 1.679 million from the middle of last month, but we haven’t seen longer-term jobless claims over 1.8 million since the last week of April.
Ralph Lauren ((RL - Free Report) shares are down this morning, following moderate beats on both top and bottom lines in its fiscal Q1: earnings of $2.34 per share outpaced the $2.15 in the Zacks consensus and more than +15% year over year. Revenues of $1.50 billion surpassed the $1.48 billion expected, basically flat year over year. However, North America sales fell -10% from the year-ago quarter, and shares are down -4.8% on the news.
Zacks Rasnk #5 (Strong Sell) Six Flags ((SIX - Free Report) shares are also down somewhat in today’s pre-market session, following a -69% miss on its bottom line with earnings coming in at 25 cents per share. Revenues in the quarter of $443.7 million missed the Zacks consensus by -5.34%. However, shares had been -2.6% immediately after the release and are only -1.6% now; perhaps the overall positivity regarding the perceived end of interest rate hikes is currently floating all boats?