Coffee With Greta: More Good Inflation News


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DJIA Futures: +78 (+0.2%)

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Good morning friends!

Futures are rising after the release of more positive inflation data.

Let’s get right to it!

PPI Drops Unexpectedly

Wholesale inflation posted the largest decline since April 2020 last month. 

The Bureau of Labor Statistics’ producer price index fell 0.5% monthly and rose 1.3% year over year in October.

That was better than expectations for a 0.1% monthly  and 1.9% annual increase.

The core PPI was unchanged monthly and up 2.4% annually vs expectations for a 0.3% monthly and 2.7% annual gain.

Retail Sales Pull Back

Retail sales fell in October for the first time in seven months.

The Commerce Department reported retail sales declined 0.1% last month to $705 billion vs expectations for a 0.2% drop. 

It was the first negative reading since March. 

Gas stations saw the largest decline in sales, dropping 11.8% as prices fell. 

Sales at furniture stores fell 5.2%, building material store sales declined 2.8%, and sales at electronics and appliance retailers were down 1.7%.

Spending at restaurants and bars jumped 11.5%, health and personal care store sales rose 8.2%, online sales rose 8.1%, sales at car dealerships jumped 3.5%, and grocery store sales rose 2.9%.

Target Jumps On Earnings Beat

Target (TGT) shares are up 13.1% ahead of the open after beating Q3 expectations on the top and bottom line. 

Here’s how the retailer’s results compared to analysts’ estimates: 

  • EPS: $2.10 vs $1.48 expected
  • Revenue: $25.4 billion vs $25.24 billion expected

Comparable sales dropped nearly 5% year over year with digital sales down 6%. 

But profit jumped 36% from a year ago as inventory levels improved, with inventory down 14%.

The CFO said, “A store can run more efficiently when their back rooms are free of inventory. A distribution center runs more efficiently, with fewer touches, when it’s not as full, too.”

Target forecast Q4 adjusted EPS between $1.90 and $2.60 and said it expects a mid-single-digit decline in comparable sales.

Mortgage Demand Climbs To 5-Week High

Mortgage demand rose for the second straight week as rates remained lower. 

The Mortgage Bankers Association reported total application volume rose 2.8% last week. 

Purchase applications rose 3% weekly and were 12% lower year over year.

Refinance applications rose 2% weekly and 7% annually. 

The average 30-year fixed contract rate was unchanged at 7.61%.

Rates have since moved lower again this week after the cooler-than-expected CPI report on Tuesday.

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