Economic Data Deluge

Pre-market futures are busy digesting this morning’s economic and earnings reports, of which there are plenty. We have to delve a bit into the past to find them as government data works to get up to speed with current times, but if it helps us chart the trajectory of the economy and the Fed’s opinions on interest rate levels going forward.

Retail Sales, PPI Mildly Mixed for September

Retail Sales numbers for September are at last hitting the tape this morning, coming in 10 basis points (bps) light of expectations to +0.2%. This comes down from the previous two months’ tallies of +0.6% each, and the lowest level since May’s -0.8%. Stripping out auto sales, we move to +0.3% — in-line with expectations, and +0.1% on autos & gas, which is below estimates. 

The Control number — that which finds its way into other monthly economic prints, such as Personal Consumption Expenditures (PCE) — came in at -0.1%, much lower than the +0.3% analysts were looking for, even farther from the +0.6% in August, and the worst monthly figure in more than a year. These are subtler weaknesses below the headlines, but likely worth paying attention to as we move toward present day’s results.

The September Producer Price Index (PPI) — the monthly wholesale inflation metrics — was in-line at +0.3%, up from the -0.1% reported the previous month but much lower than the +0.7% reported for July. Core PPI reached +0.1%, -20 bps lower than anticipated, as did ex-food, energy and transportation costs. Year over year, we tick up 10 bps from estimates to +2.7%, while core PPI year over year fell to +2.6%, -20 bps month over month. Ex-food, energy and transportation equalled expectations at +2.9%.

Preliminary ADP Jobs Down 3rd Straight Week: -13.5K

The recent addition to Automatic Data Processing ADP payroll data are the weekly reports of preliminary job gains or losses. This morning’s 4-week average falls to -13.5K, below the -2.5K reported last week and the -11K from the inaugural prelim ADP jobs report. ADP Chief Economist Nela Richardson calls this data a “pulse check” on private-sector employment, and as such it depicts not a dying patient, but a less robustly healthy one.

Next week we’ll get monthly ADP jobs numbers, which came in at +42K for October. These recent weekly takes on private-sector jobs suggest this may weaken a bit, and if the headline comes in below zero, it will be for the fourth month in the last six. We’re already seeing bond yields ratchet down this morning on this morning’s news, so it bears repeating: weak jobs growth is a good sign for lowering interest rates.

Morning Earnings Reports at a Glance: BABA, BBY & More

Zacks Rank #5 (Strong Sell)-rated Alibaba BABA missed earnings estimates by 5 cents to $0.66 per share for a -7.58% negative surprise, although a boost to revenues on stronger AI cloud sales are sending shares up +3% at this hour in the pre-market. Shares are now up more than +90% year to date.

Best Buy BBY outperformed estimates on its bottom line — earnings of $1.40 per share surpassed the $1.31 expected, and the specialty electronics big-box retailer sees a stronger holiday shopping season. Shares are up modestly on the news, but still in the red year to date.

Abercrombie & Fitch ANF surged past earnings expectations by more than +10% to $2.36 per share this morning, as its Hollister stores outperformed expectations. Shares are racing ahead +18% at this hour in pre-market activity.

Kohl’s KSS is performing even better this morning, +26% in early trading after swinging to positive +$0.10 per share from -$0.19 expected, for a positive surprise of +152%. The department store has now doubled its year-to-date gains on the news.

Dick’s Sporting Goods DKS typically posted an earnings beat this morning, with earnings of $2.78 per share versus $2.62 anticipated, for a +6.1% surprise. Shares are falling further in the red, however, as the company announced the closure of some Foot Locker locations, which Dick’s had recently acquired.

What to Expect from the Stock Market Today

We’ll dive into Case-Shiller Home Prices for September after today’s closing bell, along with Business Inventories, Consumer Confidence and Pending Home Sales, which are expected to be released after today’s open. Earnings reports from Dell DELL, Urban Outfitters URBN and AutoDesk ADSK are also expected during today’s late trading session.

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This article originally published on Zacks Investment Research (zacks.com).

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