October 12, 2023

TLDR

MARKET RECAP → All three major averages closed lower on Thursday after four straight days of gains for both the S&P 500 (VOO) and the Nasdaq (QQQ). The big story of the day dragging markets lower was the September inflation data that came out this morning and showed slightly hotter-than-expected increases in prices for the month.

INFLATION INSIGHTS → ? The consumer price index (“CPI”) increased 3.7% year-over-year in September, outpacing the 3.6% increase economists expected with shelter costs leading the surge, while vehicle prices showed mixed results, highlighting inflation’s unpredictable nature.

DELTA SOARS →? Delta’s (DAL) Q3 profits skyrocketed by 60%, driven by international travel and premium seat demand, but fuel price hikes cast a shadow on future forecasts.

Sean Horgan

Head of Investor Relations @ MoneyLion

$shorgan

Today’s S&P 500 Heatmap

Source: finviz.com

Today’s Top News

INFLATION INSIGHTS

? Above Expectations: The consumer price index (CPI) saw a rise of 0.4% in September, surpassing the Dow Jones estimate of 0.3%, according to a Labor Department report published Thursday. Annually, the increase was 3.7%, slightly higher than the anticipated 3.6%.

? Shelter Shakes Things Up: Shelter costs, accounting for about a third of the CPI weighting, were the primary factor in the increase in inflation. Shelter costs rose a notable 7.2% annually, contributing to over half of the CPI’s monthly rise.

? Mixed Moves in Markets: While energy costs climbed by 1.5% and food by 0.2%, vehicle prices presented a varied picture. New vehicles saw a 0.3% hike, but used ones dipped by 2.5%. Notably, used vehicle prices, which once fueled inflation, were down 8% year-over-year.

Source: shutterstock

DELTA SOARS

✈️ Profit Takes Flight: Delta Air Lines (DAL) reported a nearly 60% rise in Q3 profit, driven by robust travel demand, especially for international trips. However, they adjusted their full-year earnings forecast to the lower end due to escalating fuel prices.

? Premium Demand: The airline experienced a significant uptick in demand for premium seats, with premium product sales surging by 17%. Main cabin revenue also saw a 12% increase. CEO Ed Bastian highlighted that business travel had recovered to over 80% of 2019 levels.

?️ Fueling Concerns: Despite the positive earnings, Delta, like other airlines, adjusted its forecasts due to a rapid rise in fuel prices. The airline’s Q3 results were also influenced by strong trans-Atlantic travel demand, with revenue for these flights up by 34% compared to the previous year.