Thursday, November 14, 2024
This morning, pre-market trading is mild. The big relief rally following the General Election — Republicans yesterday won a majority in the House, officially making it a clean sweep — has given way to a more cautious approach, with one eye trained on economic data having influence over Fed monetary policy going forward.
The Dow is +83 points at this hour, while the S&P 500 and Nasdaq indexes are -1 point and -20 points, respectively. The small-cap Russell 2000 is +2 points. Following this morning’s economic releases, 10-year Treasury bond yields have moved up to +4.46% and the 2-year is up to +4.30%.
October PPI Shows Wholesale Prices Warming Up
On headline month over month for October’s Producer Price Index (PPI), the +0.2% reported was in-line with estimates and 20 basis points (bps) above the unrevised 0.0% reported in the prior month. Stripping out volatile food and energy prices, the core PPI month over month reached +0.3%, also 30 bps higher from September.
Year over year PPI came in at +2.4%, the third-highest print of 2024 so far, and up half a percentage point from the upwardly revised +1.9% the previous month. Core year over year came down a smidge to +3.1%, though ex-food, energy and trade this amounted to +3.5% — the hottest core wholesale inflation read since March of 2023.
By themselves, we are unlikely to see any shift in Fed policy regarding interest rates. Currently, another 25 bps cut is expected at the December 18th meeting, which would bring the Fed funds rate to +4.25-4.50%, the lowest since we were moving the other way in January of 2023. But continued hotter-than-expected inflation data may beg the question in the coming weeks.
Jobless Claims Remain Reasonable: 217K, 1.87M
Thursday morning almost always* brings us new Weekly Jobless Claims, and of late they have remained steady in a healthy labor force range. Initial Claims came in at +217K, staying within the +220K range and off the +260K we saw in early October. The previous week’s +221K is unchanged.
Continuing Claims reached +1.873 million, lower than the slightly amended +1.884 million reported the prior week. We haven’t been sub-1.8 million since late May of this year, but we have also yet to broach +1.9 million (upon revised numbers), at least since November of three years ago.
* Two weeks from today is Thanksgiving; Jobless Claims for this week will come out Wednesday instead.
Disney Up +9.4% on Strong Q4 Report
Ahead of this morning’s opening bell, The Walt Disney Co. DIS reported a 5-cent beat on its bottom line, to earnings of $1.14 per share in its fiscal Q4. Revenues of $22.6 billion also came in slightly ahead of estimates, from $22.57 billion in the Zacks consensus.
Disney+, the entertainment conglomerate’s streaming service, swung to a profit in the quarter, with a total of 174K Disney+ and Hulu subscribers. Entertainment direct-to-consumer (DTC) ad revenues grew +14% in the quarter; even ESPN saw ad revenue growth (though Sports overall were slightly down). Shares are +9.4% in pre-market trading, adding to the +13.8% share growth year to date. For more on DIS’ earnings, click here.
Check out the updated Zacks Earnings Calendar here.
JD.com Posts Mixed Q3 Results
Chinese e-commerce giant JD.com JD reported Q3 earnings ahead of the bell today, beating bottom-line estimates by +13.76% to earnings of $1.24 per share. Revenues came in ahead of expectations, $35.95 billion, short of the $36.54 billion analysts were looking for. The company reported +26.6% sales growth on +20% total shoppers. JD is often seen as a good gauge on the burgeoning middle class economy in greater China.
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