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😳 The Market Just Did Something That's Only Happened 4 Times
Thursday's historic price action, PPI numbers come in hotter-than-expected, big bank earnings and more
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Happy Friday Zingernation! Davis vs Goliath. USA vs Russia’s hockey team in the 1980 Olympics. Me vs Vegas. Most of the time the big boys win, but every now and then, the underdogs get a dub. And yesterday small caps did something that’s only happened four times in the history of the stock market.
—Aaron Bry & Nic Chahine
Plus, the Tesla of the sky? Take a look at the company that’s bringing electric vehicles to the airspace.
MARKET SNAPSHOT
Yesterday: Some wicked rotation brought the S&P 500 and Nasdaq Composite lower, while small caps outperformed on the day.
On Our Radar: CPI came in light on Thursday, but PPI came in hot this morning. The market appears to be taking the numbers in stride, aiming to open higher and reverse some of yesterday’s losses.
TOP STORY
Briefly: JP Morgan shares are trading lower after it reported second-quarter FY24 results.
The Numbers: Reported revenue rose 22% Y/Y to $50.2 billion, beating the consensus of $42.3 billion. Net revenue (managed) stood at $51.0 billion (+20% Y/Y) in the quarter.
Quoted: Jamie Dimon, Chairman and CEO, said, “While market valuations and credit spreads seem to reflect a rather benign economic outlook, we continue to be vigilant about potential tail risks. These tail risks are the same ones that we have mentioned before. The geopolitical situation remains complex and potentially the most dangerous since World War II — though its outcome and effect on the global economy remain unknown.” Here’s what the other big banks are doing this morning.
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FIVE ZINGERS
Mixed Bag: Stocks look to open mixed today following some hotter-than-expected PPI data. Here are the biggest movers.
Turn Up The Volume: Spotify’s stock is down 5% throughout the past week, but one analyst is bullish on the music-streaming giant. Here’s why.
All Good Things Must End: Tesla’s 11-day winning streak was snapped yesterday with the stock closing down nearly 9%.
At Least It’s Not The Hot Dog: Costco is raising prices, but not on its famous hot dog and soda combo.
Apple’s Rare Misstep: Historically, Apple can do no wrong. But, the company’s Vision Pro looks set to miss delivery targets significantly.
ONE FOR THE ROAD
Briefly: The Producer Price Index released Friday revealed a higher-than-expected increase in June, surprising investors who had grown confident about interest rate cuts following the sharper-than-anticipated drop in the monthly Consumer Price Index inflation gauge released a day earlier.
So: On an annual basis compared to June 2023, the overall producer basket rose by 2.6%, reaching its highest point since March 2023.
Market Reaction: Prior to the PPI report, traders had assigned a nearly 95% chance on a September rate cut, according to CME Group‘s FedWatch tool. The hotter-than-expected reading may now temper these heightened expectations, though it is unlikely to derail them altogether given the Federal Reserve’s stronger emphasis on consumer price trends. Here’s what the numbers mean for the overall market heading into Friday’s session.
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