This is what you need to know to trade today Thursday October 13:
Another CPI shock, and here we go again! We are trapped in an inflationary environment. So far that environment looks good for companies that can pass on price increases. Pepsi (PEP), Delta (DAL) and others are outweighing the benefits. Bank of America (BAC) has said that the consumer continues to look strong, so the Fed has to keep raising rates and for longer.
We will now start hearing calls for a 100 basis point hike in November. That may be the right decision. Inflation will not go down. Employment is strong. Delta said it sees strong consumer demand. Dominos (DPZ) has also seen strong consumer demand. Pepsi and Dominos are at the lower end of consumer spending, so they may react well and initially see limited decline. The top end will be more interesting. Will consumers continue to splurge on high value items?
This move will cause equities to crash again, yields to hit highs not seen since 2008 and the dollar to advance. The USD/JPY seems to tempt the Bank of Japan again. Gold is down again as it doesn’t offer any returns, so the comparison widens as rates rise. The Prayed at $1,650 and the dollar index at 113.60. The 2-year US bond yield now stands at 4.5%, and the 10-year bond yield has exceeded 4%. This will drive equity valuations lower. The Bitcoin it is down 4% to $18,300. The Petroleum it also drops to $85.90.
European markets down:
- Eurostoxx: -1.5%
- FTSE: -1.5%
- DAX: -1%
US futures lower:
- S&P 500: -two%
- dow jones: -two%
- Nasdaq: -3%
Wall Street News (SPY) (QQQ)
The US CPI hits 40-year high in core CPI, higher than expected.
There are rumors that the United Kingdom is backing down on some tax cut plans.
Delta (DAL) gives strong earnings and strong guidance for the fourth quarter.
DWAC: Truth Social accepted in the Play Store.
Victoria’s Secret (VSCO) says sales will be at the high end of forecasts.
Dominos Pizza (DPZ) has strong gains, rising 7% before the market open.
BlackRock (BLK) sees a decline in its assets while EPS is better.
The benefits of Walgreens Boots Alliance (WBA) exceed estimates.
Applied Materials (AMAT) says the export restrictions to China will mean a loss of between $250 million and $550 million in net sales in the quarter ending in October.
Taiwan Semiconductor (TSM) cut your annual investment budget.
Bank of America (BAC): The CEO says American consumers remain in good shape.
The joint venture of Honda and Sony aims to have the first electric vehicle in 2026.
Upgrades and rebates
Source: WSJ.com
Economic data
Source: Fx Street
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