In This Article:
There is plenty of economic news and quarterly earnings reports ahead of today’s open, but probably the biggest “event” to occur over this week, culminating this morning, is that trade between the U.S. and China — worth $582 billion in 2024 — has apparently ground to a halt. Both countries now have +125% tariffs on the other country’s goods (China imposes its tariff April 12) has made goods exchanges untenable. Perhaps we’ll hear than talks will be getting underway today? Still waiting.
Should this impasse hold steady for a prolonged period of time, we may expect to see pressure placed on other economic relationships besides trade between the two countries. For instance, China owns an outsized amount of U.S. mortgage-based securities. What is the risk to the domestic housing market, for instance, if this is to be weaponized against the U.S.?
PPI Numbers Slide Toward Disinflation: -0.4%
The second shoe on March price-inflation levels fell this morning with a new Producer Price Index (PPI) report showing wholesale prices somewhat mirroring yesterday’s retail Consumer Price Index (CPI), in that they are tracking decisively toward lower inflation. Importantly, these numbers are from a month ago; a couple things have changed since then…
Headline PPI in March swung to a negative -0.4% from +0.2% expected, equalling the lowest level since October of 2023. To find a lower print on headline you’d have to go back to the scorched earth of the early Covid months: April 2020. Year over year PPI hacked off half a percentage point from the previous month to +2.7%. Expectations were for a 10 basis-point (bps) increase to +3.3%.
Stripping out volatile food and energy costs bring these PPI numbers in slightly better focus: month over month came in -0.1%, 40 bps lower than the estimated +0.3%, and 30 bps lower than the prior month’s read. Ex-food, energy and trade, this also comes in below projections to +0.1%, the lowest since November. Year over year, core PPI reached +3.3% — in-line with February, but 30 bps under estimates. Ex-food, energy and trade year over year ticked up to +3.4%.
Q1 Earnings Season Gets Rolling: JPM, WFC, MS, BLK
Shares of JPMorgan Chase JPM are up +1% on its Q1 earnings release this morning. A headline $5.07 per share easily surpassed the $4.62 in the Zacks consensus, and swinging to a positive year over year versus expectations. Revenues of $46.01 billion were nicely above the $43.23 billion projected. The biggest of the big Wall Street banks has now beaten earnings estimates in 11 straight quarters, with a trailing 4-quarter average beat of +20%.