August 13, 2022

George Cafe Journal

The Power of Success

Daily Markets: The Data Reports Investors Will be Watching Today

Today’s Big Picture

Equity indices in Asia ended the day’s trading on a lower note with modest declines registered in Japan’s Nikkei, Hong Kong’s Hang Seng, and China’s Composite Index while India’s Sensex closed 0.6{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} higher. By mid-day trading, equity indices in Europe were mostly higher and U.S. futures suggest a positive market open later this morning, however that could change in the coming hours.

Similar to yesterday and the July CPI report, investors will be eagerly awaiting the July PPI report due at 8:30 AM ET today. Economists are predicting a headline rise of 0.6{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} for the month, with the annual reading of +7.3{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0}, and core PPI for the month clocking in at +0.5{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} MoM and 5.6{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} YoY. During the June quarter earnings season to date, companies have warned on rising input as well as transportation costs and coming margin pressures. Odds are the hotter and longer the PPI runs above the CPI, the more we’re likely to hear companies discussing price increases to offset those rising costs in an effort to maintain margins and hit EPS targets. For investors, the July PPI report will help put some hard numbers behind those comments and help investors re-assess EPS expectations for the balance of 2021.

Data Download

International Economy

Japan’s Producer Price Index rose more than expected at 5.6{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} YoY in July, up from 5{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} in June, where it was expected to remain.

Consumer Inflation Expectations in Australia fell to 3.3{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} in August from 3.7{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} in July.

The preliminary estimate for Q2 GDP for the UK rebounded to +4.8{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} XX after falling -1.6{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} in Q1, matching the consensus forecast. Industrial Production in the UK increased 8.3{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} YoY in June from 20.7{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} YoY in May, from which it was expected to decline to 9.4{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0}. Manufacturing Production slipped to +13.9{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} YoY in June from May’s +27.7{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} reading but topped the expected June figure of 13.6{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0}.

China saw Outstanding Loans grow +12.3{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} YoY in July, as expected and matching June’s pace. The M2 Money Supply in July rose 8.3{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} YoY from 8.6{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} in June.

The Eurozone saw Industrial Production in June rise 9.7{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} YoY, a far slower pace than the +20.5{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} recorded in May and not a fast as the expected +10.4{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0}. On a MoM basis, June Industrial Production in the Eurozone fell 0.3{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0}, a tad weaker than the expected 0.2{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} decline.

The International Energy Agency cut forecasts for global oil demand “sharply” for the rest of this year as the resurgent pandemic hits major consumers, and predicted a new surplus in 2022.

Domestic Economy

Yesterday’s CPI saw headline inflation came in at a steady 5.4{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0}, unchanged from June, versus expectations for a decline to 5.3{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0}. Core CPI fell as expected to 4.3{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} from 4.5{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0}, finally falling to a meaningful degree after three consecutive double-digit (annualized) increases in core CPI. The massive increases we have been seeing in areas like airfares, used cars, hotels, and car rentals are starting to wear off.

Later today we will get the Producer Price Index (PPI) for July and the usual weekly Jobless Claims report.


It was a fairly mild day in the markets as the Dow added 0.6{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} to closed at a new record high and the S&P 500 rose 0.2{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} to a new record high as well, while the Nasdaq dropped -0.1{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} basis points. The yield on the 10-year Treasury bond fell to 1.347{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0}. Gold dropped -0.02{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0}, silver fell 0.3{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0}, but copper added 0.8{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0}. Bitcoin lost 1.4{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} and Ethereum fell 1.9{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0}.

Stocks to Watch

Before U.S. equity markets open this morning, investors will be thumbing through a number of quarterly earnings reports including those from Baidu (BIDU), CyberArk (CYBR), Good RX (GDRX), and Utz Brands (UTZ).

Blink Charging (BLNK) Q2 revenues were almost 2x expectations but the company also reported a much larger net loss than expected, driven by operating expenses that were 278{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} higher versus the same quarter last year. The company is growing rapidly with total charging stations contracted, sold, or deployed rising from 380 a year ago to 3,264 this quarter – that warrants a holy cow! The company’s geographic footprint includes installation contracts ranging from Chile to New York, New Jersey to Texas and a deal with General Motors (GM) to provide GM EV customers access to the Blink network.

Chinese EV company Nio Inc. (NIO) reported a smaller than expected loss for its June quarter as revenue for the quarter rose 127{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} YoY to RMP 7.91 billion, missing the RMB 8.3 billion consensus. For the current quarter, Nio sees revenue in the range of RMB 8.9-9.6 billion vs. the RMB 9.2 billion consensus.

A smaller than expected June quarter loss was delivered by end-to-end e-commerce platform company Vroom (VRM). Revenue for the quarter jumped 21{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} YoY to $761.9 million, crushing the $651 million consensus. E-commerce units sold during the quarter increased 172{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} YoY to $18,268 driving e-commerce revenue up 230{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} YoY to$579.7 million. For the current quarter, Vroom expects e-commerce unit sales of 20,000-20,500, implying year over year growth of 130{1c85f339815b3f699ae0fdee90a747b715d9a8e52ec31221581a933b2596fac0} at the mid-point of the guidance range, with an average e-commerce selling price per unit of $32,000-$33,000 and average e-commerce gross profit per unit of $2,350 to $2,450.

The Financial Times reports shares in Coupang (CPNG), the SoftBank (SFTBF) backed e-commerce group, plunged in after-hours trading as it reported wider quarterly losses after a fire destroyed the company’s biggest logistics center in South Korea.

Hon Hai Precision (HNHPF), Apple’s (AAPL) main assembly partner, projected sales of gadgets like smartphones will drop sequentially this quarter, spurring concerns that chip and component shortages may affect iPhone production before the holiday season.

At 1 PM ET, FireEye (FEYE) conducts its monthly threat briefings for investors and financial analysts to provide visibility into trends in the global cyber threat landscape.

Amazon’s (AMZN) Amazon Web Services announced a global collaboration with Wyndham Hotels & Resorts (WH) to upgrade its technology infrastructure and develop and deliver new guest services across its 21 hotel brands—including Days Inn, La Quinta, Microtel, Ramada, Super 8, and Wyndham.

Toll Brothers (TOL) acquired StoryBook Homes, a privately-held homebuilder based in Las Vegas, Nevada. Terms were not disclosed.

Reports suggest that over the past two months, DoorDash (DASH) held talks to buy privately held Instacart for a price that likely would have been between $40-$50 billion.

After today’s market close, Airbnb (ABNB), DoorDash (DASH), and Walt Disney (DIS) will be among the companies reporting their quarterly results. Those looking to get a jump on earnings reports to be had in the coming days should visit Nasdaq’s earnings calendar page.

On the Horizon

  • August 13: Import & Export Prices, University of Michigan Consumer Sentiment
  • August 16: NY Empire State Manufacturing, Net Long-term TIC flows, Overall Net Capital Flows, Foreign Bond Investment
  • August 17: NAHB Housing Market Index, Retail Sales, Industrial Production, Business Inventories
  • August 18: Building Permits, Housing Starts, EIA Energy Stocks, FOMC Minutes
  • August 19: Philadelphia Fed Manufacturing Index, weekly jobless claims
  • August 23: Chicago Fed National Activity Index, Markit Manufacturing, Services & Composite PMIs, Existing Home Sales
  • August 24: New Home Sales, API Crude Oil Stock report
  • August 25: Durable Goods Orders, EIA Energy Stocks
  • August 26: Jobless Claims, GDP Growth Q2, Corporate Profits
  • August 27: Personal Income & Spending, Wholesale Inventories, PCE Price Index, Goods Trade Balance, University of Michigan Consumer Sentiment Report
  • August 30: Pending Home Sales, Dallas Fed Manufacturing
  • August 31: S&P/Case-Shiller Home Price Index, Chicago PMI, Conference Board Consumer Confidence, API Crude Oil Stock report

Thought for the Day

“When people went on vacation, they shed their home skins, thought they could be a new person.” – Aimee Friedman


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.