CPI caused the Earnings to be ignored

Delta and JPMorgan beat the expectations

Market analyst – IFC Markets

Wednesday’s earnings report officially started with great results. Especially JPMorgan and Delta Airlines that market participants have been following closely. 

JPMorgan (JPM) with $3.74 EPS, better than $3 beat the expectations, however, 29.65B Revenue was much less than 29.86B expectations. Delta Airlines also with $0.3 EPS beat the $0.1614 estimates, and 9.15BRevenue also was above 8.41B expectations. 

Delta Airline, despite the Covid-19 effects and higher ticket prices, still performs better than estimates. However, they warned that higher Oil prices can pressure its margins in the last quarter of the year. This comment caused a 5.37% fall in its share price to $41.20

For JPMorgan also we had almost the same reaction in the market and they ignored the reports. More than everything, market participants focused on part of the report that was about EPS payments. The bank relied on the user over $2 billion in reserves to beat street forecasts for earnings per share. In this report, the bank’s lending business was much weaker than expectations, in line with trading bonds, currencies, and commodities in its worst situation in the past two years. However, the strong performance of the asset management operations was the savior. 

After all, earnings beats were offset by the consumer price index data that showed prices still increasing and have no intention to decrease. 

Consumer prices rose by 0.4% on a monthly basis, while on an annual scale increased by 5.4%. In both scales, inflation was 0.1% above expectations. The core CPI also rose 0.2% on the month and 4.0% on the year, in line with expectations. These numbers telling us that investors are really worried about the inflation path and for now it is much more important. 

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