U.S. futures prices rise as inflation falls more than expected

live4 updates

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  Thursday, July 11, 2024 at 8:44 a.m. EDT

  Inflation falls in June for first time since 2020

  Two years ago, the June CPI report delivered the news to investors that inflation was rising at its fastest pace in 40 years.

  Investors learned today that inflation fell last month for the first time since May 2020, as the likelihood of the Federal Reserve cutting interest rates (multiple times) later this year becomes more likely by the day.

  The headline Consumer Price Index (CPI) fell 0.1% from the previous month in June after prices were unchanged in May. On a “core” basis, which excludes food and energy, the CPI rose 0.1%. Economists had expected prices to rise 0.1% and 0.2%, respectively, last month.

  Year-on-year, prices rose 3% in June, and 3.3% on a core basis.

  The year-over-year increase in core CPI was the smallest since April 2021.

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  Thursday, July 11, 2024 at 7:00 a.m. EDT

  Delta joins PepsiCo in calling out consumer vulnerability

  Okay, okay, we get it. PepsiCo (PEP) and Delta (DAL) announced their results this morning, leaving us with two more reports to come in earnings season.

  But I have immediate concerns about the consumer situation and how that will affect the tone of earnings reports in the coming weeks (which will be released against the backdrop of record markets).

  Delta Airlines CEO Ed Bastian told Yahoo Finance’s Brad Smith about consumers:

  “The second quarter was really strong. We expect the third quarter to be a strong quarter as well. The domestic market is Price sensitivity is starting to show up a little more, and it’s happening in the lower fare areas.“

  PepsiCo CEO Ramon Laguarta said this about consumers during the earnings call:

  “In the second quarter, our business remained agile, delivering net revenue growth, strong gross and operating margin expansion and double-digit EPS growth, despite a challenging year-over-year net revenue growth environment. North American convenience food sector performs poorly and impacts related to certain product recalls at Quaker Foods North America.”

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  Thursday, July 11, 2024 at 6:47 a.m. EDT

  A quick look at PepsiCo’s earnings

  PepsiCo’s (PEP) eighth straight quarter of declining global sales volumes won’t be very kind to investors this morning.

  The stock price fell 2% in pre-market trading, which seems to be to be expected after the earnings announcement.

  I’ll be speaking on a call with PepsiCo CEO Ramon Laguarta today at approximately 9:30am ET, then head over to Yahoo Finance at approximately 9:50am ET to see our latest analysis.

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  Thursday, July 11, 2024, 5:16 a.m. EDT

  Costco stock price before and after membership fee hike

  Costco (COST) finally made its controversial decision last night to increase its membership fees.

  The entry-level fee will increase from $60 to $65, while the higher-level membership fee will increase by $10 to $130.

  Here’s the mood for Costco stock before and after the fee hike, according to Stifel analyst Mark Astrachan:

  “COST stock has outperformed the S&P 500 in the 3, 6, 9 and 12 months leading up to fee increase announcements over the past three cycles since 2006, with price increases occurring in 2006, 2011 and 2017. For example, in the three price increases beginning in 2006, COST stock outperformed the S&P 500 by an average of 11.3% in the 12 months prior to the MFI announcement. The average outperformers were the 6 and 9 months prior to the MFI, with gains of 13.6% and 14.3%, respectively. Conversely, COST stock has consistently underperformed the S&P 500 over the same time periods following the MFI announcement.”

  Costco shares are up 34% since the beginning of the year.