Wall Street Today | US consumers expect inflation shock to pass, NY Fed survey finds
MACRO
S&P 500 Believers See Light Forming in the Market
After falling 15% this year, the S&P 500 is trading around 4,000. According to analysts tracked by Bloomberg, its members will earn a combined $248 a share next year. Divide price by earnings, and the result is a forward multiple of 16 -- roughly in line with the three-decade average. So not dirt cheap, but perhaps reasonably priced.
Arguments that the selling has gone too far have been put forward by analysts at $Goldman Sachs(GS.US$ and $JPMorgan(JPM.US$, who say recent price action overestimates the likelihood of a recession. A quick bounce could take hold should bond yields peak, $Credit Suisse(CS.US$ similarly contended.
US Consumers Expect Inflation Shock to Pass, NY Fed Survey Finds
US consumers still largely expect the current inflationary shock to be temporary, and for price gains to be low and stable in the longer run.
"While short-term inflation expectations have continued to trend upward, medium-term inflation expectations appear to have reached a plateau over the past few months, and longer-term inflation expectations have remained remarkably stable," the researchers wrote in a blog that was co-authored by New York Fed President John Williams.
SECTORS
Natural-Gas Prices Surge as Summer Cooling Season Switches On
Prices topped $9 per million British thermal units for the first time since 2008, before frackers flooded the market with cheap shale gas. The cost of the power-generation fuel has added more than 20% this month and tripled over the past year, adding pressure to household budgets and manufacturing costs. Natural gas has been a major driver of inflation, and prices have been accelerating.
American Shoppers Boost Retailers With Spending on Work Clothes, Discount Staples
$Macy's(M.US$ and $Dollar Tree(DLTR.US$ reported strong sales increases in their most recent quarters. Those results came as shoppers spent more on clothing for work and special occasions, while turning to discount chains for necessities to offset rising costs for food and fuel. Another budget chain, $Dollar General(DG.US$ posted flat sales but raised its outlook for the full year, saying cash-strapped shoppers are gravitating to its stores more frequently.
COMPANIES
Twitter to Pay $150 Million Privacy Fine as Elon Musk Deal Looms
$Twitter (Delisted)(TWTR.US$ on Wednesday agreed to new oversight and a $150 million penalty to settle a federal privacy suit, the first major deal between a large tech company and the Biden administration Federal Trade Commission, which has pledged to more aggressively police data abuses.
Federal prosecutors alleged that Twitter collected phone numbers and email addresses for account security measures and then fed the information into its advertising tools, an additional use of the data the government said it failed to disclose.
Microsoft Exec Tells Employees in Windows and Office Groups to Be More Cautious in Hiring
Rajesh Jha, executive vice president in charge of Office and part of Windows, told staffers in his group on Thursday to be more cautious when it comes to opening up new roles and to request permission from Jha's leadership team first. The move comes a month before Microsoft starts its new fiscal year, a time when the company regularly reorganizes.
Costco Sales Top Estimates by $1 Billion, but Misses on Same-store Sales
$Costco(COST.US$ stays on track for first $200 billion revenue year, but sales rose 10.8% at stores that existed last year, missing estimates. The company brought in $1 billion more in revenue than expected in its latest quarter, keeping the retailer on track for its first $200 billion year.
Gap Shares Fall 13% After Retailer Slashes Profit Guidance for the Year
$Gap Inc(GPS.US$ on Thursday slashed its profit guidance for the full year as it reported a decline in fiscal first-quarter sales, which were dragged down by its Old Navy business. Shares fell around 13% after hours, after closing the day up 4%.
Source: Bloomberg, WSJ, CNBC
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