Inflation, retail sales and income reports

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Stocks were mixed for the shortened week, with only the Russell 2000 posting a gain for the week.

Earnings season kicked off this week. While the number of earnings reports will increase in the coming weeks, the biggest banks reported in droves this week, while Delta Air Lines (DAL) and American Airlines (AAL) set the bar high for earnings reports. upcoming airlines.

Twitter (TWTR) has been in the headlines just about every day this week as the company’s Elon Musk saga continues. This week started with Musk turning down the board seat and ended with Musk making a $43 billion bid to acquire Twitter, which would be $54 per share. Since the market opened on Monday, Twitter stock has jumped 27.36% to $46.34 per share.

Inflation reports

This week had two key inflation reports, the Producer Price Index and the Consumer Price Index.

Consumer prices rose 1.2% expected in March, while core consumer prices rose less than expected with an increase of 0.3%.

Meanwhile, core numbers and headlines exceeded expectations on the producers’ side. Producer prices rose 1.4% in March and, excluding food and energy, rose 1%.

Retail sales

The headline retail sales figure missed the target for March, rising 0.5% as retail sales slowed from February’s 0.8% rise. Meanwhile, excluding autos, retail sales rose 1.1% and beat expectations as sales growth accelerated after rising 0.6% in February.

The big takeaway from this report is that, excluding gasoline sales, spending fell 0.3% in March. This suggests that pump prices reduce consumers’ ability to spend on other goods and services.

Banks

Bank earnings got off to an alarming start this week with a shortfall from JPMorgan Chase (JPM).

JPMorgan dragged bank shares lower on Wednesday after the company’s earnings slid a whopping $524 million from the fallout from sanctions on Russia.

Banks’ subsequent earnings weren’t as surprising as JPMorgan and most beat expectations. Although they beat expectations, the results are down from a year earlier, with analysts expecting a 37% drop in bank revenue, according to FactSet, as banks grapple with a base effect due to the overlap with plump 2021 earnings.

Airlines companies

Airlines saw great weakness, rising 1.29% overall on Friday and 6.58% over the past 5 days.

On Monday morning, American Airlines (AAL) got the ball rolling for the industry, which raised its forecast for the second time in less than a month. American expects to return to profitability in 2022, after two years of losses, as – for now – the fare hike is successfully passed on to consumers without hampering demand for seats.

The next day, Delta Air Lines (DAL) soared on strong earnings and better-than-expected revenue, which included a bullish outlook for the rest of 2022. This report showed a 70% return in air travel business and included tips for improving operations. margins within a range of 12% to 14%.

American’s strong rise from its forecast and Delta’s strong report underscored a strong recovery in air travel as robust demand was unaffected by higher fares.

In total, the S&P 500 fell 2.13% and the Nasdaq 2.63%. Meanwhile, the Russell 2000 rose 0.60% and the Dow edged down 0.78%.

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