• 302
  • 57
  • Favorite

Dow retreats slightly from record as hot inflation report overshadows strong earnings

Tiger Newspress2021-07-13

Stocks fell slightly on Tuesday after a hotter-than-expected inflation report overshadowed a strong start to second-quarter earnings season.

The Dow Jones Industrial average shed 20 points, or 0.1%. The measure closed at a record just below 35,000 the day prior. The S&P 500 lost 0.1%. The Nasdaq Composite also fell 0.1%.

Inflation rose at its fastest pace in nearly 13 years,the Labor Department reported Tuesday. The consumer price index increased 5.4% from a year ago; economists surveyed by Dow Jones expected a 5% gain. Core CPI, excluding food and energy, jumped 4.5%, the sharpest move for that measure since September 1991 and well above the estimate of 3.8%.

"A white-hot June CPI print has the markets jittery this morning," Cliff Hodge, CIO at Cornerstone Wealth, said. "Moving forward we expect these inflation numbers to begin to cool. June 2020 was the absolute low for Core CPI during the pandemic shutdown, so the comparisons get tougher from here. Used car prices soared 45% year over year which is not likely to persist in coming months."

The10-year U.S. Treasury yield edged slightly higher following the CPI report.

The latest inflation data came after big banks and PepsiCo posted blowout second-quarter earnings reports beating Wall Street estimates. But with stocks at record highs and the Dow Jones Industrial Average just shy of 35,000, expectations likely ran higher than the official estimates reflected.

JPMorgan Chase shares dipped in the premarket even after posting second-quarter earningsof $11.9 billion, or $3.78 per share, which exceeded the $3.21 estimate of analysts surveyed by Refinitiv.

Banks set aside billions of dollars for loan losses amid the pandemic, but have been releasing those reserves as consumers performed better than expected. JPMorgan released $3 billion in loan loss reserves after taking just $734 million in charge-offs. That gave the firm a $2.3 billion benefit, allowing the bank to top earnings expectations. Investors may be giving less credit to JPMorgan's earnings beat due to this loan loss reserve release.

Meanwhile, Goldman Sachs shared edged about 1% higher in premarket trading. The firm reported second-quarter earnings of $15.02 per share, topping analysts' expectation of $10.24 earnings per share. The bank posted its second-best ever quarterly investment banking revenue as a rush of IPOs hit Wall Street last quarter.

PepsiCo also crushed estimates for its second-quarter earnings and revenue, fueled by returning restaurant demand. The drink and snack giant also raised its forecast. Shares added more than 1% in premarket trading.

Overall earnings reports are expected to be stellar for the second quarter over the coming weeks with profit growth estimated at 64% year-over-year for the quarter, according to FactSet. That would be the biggest quarterly profit increase since 2009.

Banks' earnings are expected to more than double for the second quarter, with an estimated 119.5% estimated year-over-year growth rate, according to analysts polled by FactSet.

In the regular trading session on Monday theDowrose 126.02 points to close just below 35,000. The blue-chip measure is up 14% this year. TheS&P 500andNasdaq Compositegained 0.3% and 0.2%, respectively, to record closes.

"High expectations for earnings and each companies' forward guidance will push markets higher or disappointment may create a small pullback in equity markets," said Jeff Kilburg, chief investment officer at Sanctuary Wealth. "Eyes will be on the major banks to set the tone for the next few weeks of earnings."

Bank of America,Citi group,Wells Fargo and Morgan Stanley all ended Monday higher as well. They will report their earnings later in the week.

Federal Reserve Chairman Jerome Powellis scheduled to appearin front of Congress Wednesday and Thursday to provide an update on monetary policy. He has maintained that the Fed's easy policies will remain intact until there's more progress on its employment and inflation goals.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Report

Comment57

  • FU5591
    ·2021-07-14
    oo
    Reply
    Report
  • Sherminxm
    ·2021-07-14
    Oh wow
    Reply
    Report
  • Gingeryoyo
    ·2021-07-14
    See see
    Reply
    Report
  • STKG
    ·2021-07-14
    Inflation rate will impact all. 
    Reply
    Report
    Fold Replies
    • Mr小白
      oh no
      2021-07-14
      Reply
      Report
  • Cassjo
    ·2021-07-14
    Ok
    Reply
    Report
  • AshpA
    ·2021-07-14
    Possibly be a hawkish speech
    Reply
    Report
  • replaygoh
    ·2021-07-14
    really??
    Reply
    Report
  • SniperTig
    ·2021-07-14
    Like n comment 
    Reply
    Report
    Fold Replies
    • AshpA
      DOne
      2021-07-14
      Reply
      Report
  • DanVI
    ·2021-07-14
    It’s bad!! Pls like and comment ?
    Reply
    Report
    Fold Replies
    • DanVI
      Thank you?
      2021-07-14
      Reply
      Report
    • buckethead
      ok done
      2021-07-14
      Reply
      Report
    • AshpA
      Done
      2021-07-14
      Reply
      Report
    View more 2 comments
  • Lailailai
    ·2021-07-14
    Ok
    Reply
    Report
  • Sharoncpg
    ·2021-07-14
    Noted
    Reply
    Report
  • Sharoncpg
    ·2021-07-14
    Noted
    Reply
    Report
  • plasticbag
    ·2021-07-13
    Like n comment
    Reply
    Report
    Fold Replies
    • DanVI
      Done
      2021-07-14
      Reply
      Report
    • plasticbag
      done
      2021-07-13
      Reply
      Report
  • Lilian Lim
    ·2021-07-13
    [Smile] [Smile] 
    Reply
    Report
  • sleepymoon
    ·2021-07-13
    Like please 
    Reply
    Report
    Fold Replies
    • Caliban
      yes
      2021-07-15
      Reply
      Report
    • Caliban
      yes
      2021-07-14
      Reply
      Report
    • ahleemama
      sure
      2021-07-13
      Reply
      Report
    View more 1 comments
  • Rowenstitch
    ·2021-07-13
    Good
    Reply
    Report
  • Workaholyk
    ·2021-07-13
    More mini fireworks please 
    Reply
    Report
  • vincentheng8
    ·2021-07-13
    Down
    Reply
    Report
  • Barumaru
    ·2021-07-13
    [Smile] 
    Reply
    Report
  • SuperHuat
    ·2021-07-13
    oh well
    Reply
    Report
 
 
 
 

Most Discussed

 
 
 
 
 

7x24

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Company: TTMF Limited. Tech supported by Xiangshang Yixin.

Email:uservice@ttm.financial