Thursday Morning Rebel Brief — PPI, Jobless Claims, JPM, TSM, MS Earnings

Market Rebellion

This article was last updated on 07/14/2022.

PPI data

Good morning Rebels! It’s almost Friday as we wrap up another choppy red week for the market. The indices are trading lower this morning on the back of yesterdays CPI data which showed yet another increase in inflation, on top of a slew of economic data this morning, including PPI data (which measures the price of goods from the lens of a producer), initial & continuing jobless claims, and earnings from a few notable companies. Let’s get right into it!

PPI Data – Producer Price Data

PPI Data was a mixed bag this morning indicating that food, energy and trade (extra emphasis on energy) are priced above expectations. However, when you strip out those three factors, the situation starts to look a lot rosier. Year-over-year the PPI still came in well above expectations, indicating that prices have not stopped their steady rise higher (if yesterday’s CPI Report didn’t tell you already).

  • Producer Price Index for June, Headline Number: +1.1 vs 0.8% expected (vs. a 2022 high of +1.6% in March)
  • PPI Ex-Energy: +0.4% vs 0.5% expected (vs a 2022 high of +1.2 in March)
  • PPI Ex-Food, Energy and Trade: +0.3% vs 0.5% expected
  • Year over year: increase of +11.3% vs 10.7% expected (vs 10.9% last month)
  • Year-over-year PPI Ex-Energy: 8.2% vs 8.2% expected 
  • PPI Ex-Food, Energy, and Trade: 6.4% vs 6.6 expected

Jobless Data

Jobless claims for this week, like the PPI Data, showed an interesting mix — initial jobless claims are up (initial jobless claims measure the amount of people who are claiming unemployment for the first time). This is a continuation of the steady climb higher that initial jobless claims have been on since April 7th’s 167K reading.

Simultaneously, continuing claims (continuing claims measure the amount of people who continuing to claim unemployment) have fallen week-over-week, complicating an already complicated story. 

  • Initial Jobless Claims: 244K this week vs 235K last week , +9K initial jobless claims week-over-week
  • Continuing Claims: 1.331M vs 1.375M last week, -44K continuing claims week-over-week

Unusual Options Activity

Treasury Inversion

When the 2 year and 10 year Treasury’s invert, it’s often seen as a sign of an upcoming recession. Today, the inversion between the 10s and 2s are hovering below 25 basis points, the largest inversion since the year 2,000. 

PPI DataShaded areas indicate recession. Source: St. Louis Fed

Earnings Results

Earnings season is here! Over the next two week we’ll see results from thousands of the largest companies in the market! Here are the results from:

JP Morgan (JPM)

EPS Miss of $2.76 vs $2.88 expected

Revenue Beat of $34.23B vs $31.98B

CEO Jamie Dimon blamed a weak global economy driven mostly by inflation and weakened consumer confidence. 

JPM is trading $108.50 in the premarket, a loss of -3.05%

Morgan Stanley (MS)

EPS Miss of $1.44 vs $1.61 expected

Revenue Miss of $13.13B vs $13.50B expected

Morgan Stanley said equity and fixed income results were still strong, however investment bank revenue and activity were lower than expected.

MS is trading at $74.34 in the premarket, a loss of -0.85%.

Taiwan Semiconductor (TSM)

EPS Beat of $1.55 vs $1.50 expected

Revenue Beat of $18.16B vs $17.58B expected

TSM issued strong guidance, expecting Q3 revenue to be between $19.8B and $20.6B vs $18.46B expected. 

TSM is trading at $82.80 in the premarket, a gain of +1.86%.

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Unusual Options Activity

The major indices (and most of the market) plummeted at 8:30 — here’s the S&P heat map:

For more quick takes on this morning’s market-moving news, check out 60 Seconds With Jon Najarian!

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