Morning Minutes

Rising Inflation Overshadows Strong US Earnings; Webinar Today



US Q2 earnings season is off to a very positive start with three senior companies crushing street expectations including Goldman Sachs (EPS $15.02 vs street $10.24, revenues $15.3B vs street $12.1B), JPMorgan (EPS $3.78 vs street $3.21, $2.3B benefit from the release of loan loss reserves), and PepsiCo (EPS $1.72 vs street $1.53, sales $19.2B vs street $19.9B, company benefitted from economy reopening, especially restaurants). Response to these results, however, has been muted in premarket action so far.

Economic news has also picked up. Overnight China reported a much stronger than expected trade surplus ($51.5B vs street $44.2B). Both export (20.2% vs street 29.6%) and import growth (24.2% vs street 32.3%), were weaker than expected. The Hang Seng rallied 1.6% on the news, but copper dropped 1.0%.  

US inflation pressures continue to build. Headline consumer prices (5.4% vs street 4.9%) and consumer prices excluding food and energy (4.5% vs street 4.0% and previous 3.8%) both accelerated even more than the street had feared.

Since the inflation report came out, US index futures have dropped 0.2%-0.3% into the red after spending the morning flat to up 0.3%. The 10-year treasury note yield has moved up a bit as well from near 1.34% toward 1.38%. Over in Europe, the FTSE and DAX have been flat through the morning. WTI crude oil is also steady so far today.

SIA Wealth Market Outlook Webinar Today July 13, 2:00 pm EDT

Please join us on Tuesday July 13 @ 12pm MT / 2pm ET for our Market Outlook Webinar with Jeremy Fehr.  He will answer the most asked questions we have received from advisors over the past month.

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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