Wall Street up slightly: challenges inflation fears and prepares for the US quarterly test. The Dow Jones rose 0.34% to 36,414 points; the S&P 500 advanced 0.30% to 4,740 points. The Nasdaq is + 0.37% at 15,250.
Ten-year Treasury rates are up slightly to 1.731%.
Focus on macro data, but also on the US earnings season that has just begun.
Inflation remains a major player in the markets, with its flare-up in the States, which was confirmed again today, for the second consecutive session. Producer price index published, following the release of the consumer price index, both for the month of December.
The producer price index flew by 9.7% on an annual basis, making slightly less than the jump of + 9.8% expected, and accelerating compared to the previous + 9.6%. On a monthly basis, the figure was up 0.2%, less than the estimated + 0.5%. With regard to the core component, the producer price index increased by 8.3%, more than the + 8% estimated by the consensus. The core component recorded a growth of 0.4% on a monthly basis, less than the estimated + 0.5%.
Yesterday, the consumer price index was announced, which accelerated its pace, jumping to the annual rate of 7%, compared to + 6.8% in November, starting at the record since February 1982, in however, in line with expectations. On a monthly basis, however, the growth was higher than expected, equal to + 0.5%, compared to the + 0.4% expected.
More than expected was also the annual rise in the core component of the data, i.e. the index adjusted for the prices of food and energy goods, the core inflation, advanced by 5.5%, compared to the previous + 4.9%, against the + 5.4% expected. Lastly, more than expected, the growth in core inflation on a monthly basis, equal to + 0.6%, against the + 0.4% expected.
It must be said that, both yesterday and today, accustomed to fear the worst by now, investors almost breathed a sigh of relief in realizing that, in December, inflation did accelerate its pace but not at a shock rate. .
In short, no inflation trauma, as also demonstrated by the trend in US Treasury rates, after the record boom from 1.51% at the end of 2021 to over 1.80% a few days ago, at the levels prior to the Covid pandemic. .
Today macro indications have also arrived from the labor market, with the publication of the report on the initial applications for unemployment benefits.
The report found that in the week ending January 8, the number of US workers applying for unemployment benefits rose by 23,000 to 230,000, worse than expected. Economists interviewed by Dow Jones had predicted a drop to 200,000 units, from 207,000 units last week. The four-week moving average rose to 210,750 from 204,500 the previous week.
However, a positive surprise came from the number of American workers who continue to receive unemployment benefits, which fell to 1.559 million, much better than the 1.733 million expected by the consensus, and at a minimum since the week ending June 2, 1973, therefore in almost 50 years.
Commenting on the equity trend in LPL Financial’s Ryan Detrick in the past few hours, he noted that “the market is now excited about the earnings season just around the corner. We expect further solid results for corporate America.” Detrick called the quarterly season “a chance to stop focusing so much on the Fed and monetary policy, to focus on how the economy is performing.”
On the corporate front, keep an eye on Delta Air Lines stock, after the American airline announced that it ended the fourth quarter of the year 2021 with the highest turnover since the end of 2019, thanks to the growth in ticket bookings ahead of the period. holiday of Christmas and at the highest frequency of trips. Turnover stood at $ 9.47 billion, beating the $ 9.21 billion expected by the consensus, although still down 17% from $ 11.44 billion in the fourth quarter of 2019, when in the world it was not triggered. again the Covid alarm.
Delta Air Lines also announced that it expects that, due to the spread of Omicron, its balance sheet will suffer a loss in the first quarter of 2022; in any case, the group confirmed the estimates of a recovery in demand and a return to profitability during the year.
The Delta stock thus jumped in the premarket up to + 2.7%. By 2020, Delta was an illustrious victim of the pandemic, with a record loss of $ 12.4 billion.
Buy also on the stock of KB Home, a company active in the construction sector with the construction of houses: the share jumped by more than 10%, also in this case in the wake of a quarterly report that was better than expected.
Boeing’s rally is also highlighted, after Bloomberg News indiscretions that its 737 Max aircraft will return to operating in China’s airports as early as this month.
From tomorrow the season of corporate profits made in the USA will kick off with the publication of the quarterly reports of JP Morgan, Citi and Wells Fargo. The three stocks report a positive trend.
Considering the earnings of companies listed on the S&P 500 in general, FactSet expects growth of 21.7% for the fourth quarter: if this forecast materializes, it would be the fourth consecutive quarter of growth at a rate of more than 20% .