Inflation Spike Weighs on Stock Futures, Bank Earnings

JPMorgan Chase and Goldman Sachs earnings are in

Deputy Editor
Jul 13, 2021 at 9:14 AM
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Stock futures have turned lower this morning, with the Dow Jones Industrial Average (DJI) poised to shed 80 points, and the S&P 500 Index (SPX) and Nasdaq-100 Index (NDX) indicating modest openings in the red. This negative price action came after the U.S. Labor Department reported a 5.4% year-over-year rise in the consumer price index  -- marking its fastest pace in almost 13 years -- and toppling the 5% expectations. Inflation data running hot is overshadowing an earnings season kicking off on a high note, with blue-chip bank names JPMorgan Chase (JPM) and Goldman Sachs (GS) both reporting quarterly results that topped estimates. 

Continue reading for more on today's market, including:

  • Senior Market Strategist Matthew Timpane unpacks whether the market is headed for a consolidation phase
  • This freelance stock could be a smart bet for options traders.
  • Plus, CAG cuts 2022 forecast; Soda stock heading for a pop; and and a big upgrade for Hanesbrands. 

futures chart july 13

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 1.6 million call contracts traded on Monday, compared to 807,358 put contracts. The single-session equity put/call ratio fell to 0.49 and the 21-day moving average stayed at 0.46.
  2. Conagra Brands Inc (NYSE:CAG) is off by 3.8% ahead of the bell, even after its fiscal third-quarter earnings and revenue topped expectations. The food processing giant is being weighed down by news that the company slashed its fiscal 2022 full-year outlook, blaming the recent spike in inflation. Conagra stock is sinking even further below its year-to-date breakeven, which has acted as a ceiling on the charts of late. 
  3. PepsiCo, Inc. (NASDAQ:PEP) is up 1.3% in electronic trading, after the soda company's fiscal first-quarter earnings and revenue topped analysts' estimates. PepsiCo also raised its full-year forecast, citing strong demand for beverages in North America. PEP is up over 11% year-over-year heading into today.
  4. Wells Fargo upgraded Hanesbrands Inc. (NYSE:HBI) to "overweight" from "equal  weight," citing the firm's promising new leadership team and business direction. HBI is up 3.9% this morning, and sports a roughly 25% lead for 2021. 

  5. Today will bring the the Federal budget balance, and a Congressional hearing from Fed Chair Jerome Powell.

OV Buzz July 13

Asian Markets Brush Off Covid-19 Concerns 

Markets in Asia were higher today, despite concerns regarding the delta variant of Covid-19. Hong Kong's Hang Seng paced the region with a 1.6% gain. Elsewhere, the South Korean Kospi tacked on 0.8%, while Japan's Nikkei and China's Shanghai Composite both added 0.5%. China's exports jumped 32.2% year-over-year in June, showing faster-than-expected growth as global demand picked up, and the country's imports surged as well.

Markets in Europe are inching higher as well, with the exception of the French CAC 40, which is down 0.2% at last check. Investors are eyeing stateside bank earnings, plus, the Bank of England ended its pandemic-induced curb on dividends and share buybacks. London's FTSE 100 is up 0.06% midday, while the German DAX is posting a 0.01% gain.

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