Insurance ETFs Shrug Off Hurricane, 'Quick Buck' ETFs Rise
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On today's episode of Morning Brief, Hosts Seana Smith and Brad Smith break the latest Consumer Price Index data and analyze the market open. The latest Consumer Price Index (CPI) report shows prices rose 0.2% in September, which was more than the 0.1% Bloomberg consensus estimate. Year-over-year prices rose 2.4% versus the 2.3% estimate. When stripping out the more volatile food and energy components, prices rose 0.3% month-over-month and 3.3% year-over-year, both higher than economists were expecting. US stocks (^DJI, ^IXIC, ^GSPC) opened Thursday's session lower as Wall Street digested the hotter-than-expected CPI report. The Nasdaq Composite fell by over 0.40%. Yahoo Finance Senior Reporter Alexandra Canal and Catalysts Anchor Madison Mills break down inflation's impact on shelter pricing and auto insurance costs. Yardeni Research Chief Markets Strategist Eric Wallerstein believes that following September's CPI print, the Federal Reserve doesn't have to cut rates during the rest of 2024. He explains, "Unfortunately, we're going to get some weather impacts in the jobs data in the coming months. But I think as long as inflation isn't getting towards 2% so dramatically, and there's no crisis that unfolds in the labor market, which I don't foresee, I don't think there's anything that gives the Fed reason to cut further this year," Wallerstein explains. Omair Sharif, Inflation Insights president, adds, “Admittedly, some things were hotter than expected today. But I think some of that stuff is more likely than not to just be a one-off in this particular month." He continues, “Given that hot print today, even though I do think some of this stuff will reverse course pretty quickly, I think that's if you were thinking 50 bps [cut at the Fed’s November meeting] that's pretty much been wiped out at this stage… I think the Fed still wants to progress slowly here. So I think 25 [bps cut] is the base case for November.” Marvin Loh, State Street senior global macro strategist discusses how the tech sector (XLK) will be impacted by the Federal Reserve's rate-cutting cycle. Loh believes that tech will be "one of the bigger beneficiaries" of the Fed's interest rate cuts. He notes that the sector has demonstrated strong earnings growth, and it is one of the few areas of the market that hasn't experienced significant revisions. "So that kind of stronger story is still out there. You know, quality growth generating cash and really defendable moats are kind of where you want to put some of your long-term bets," he tells Yahoo Finance. Delta Air Lines (DAL) fell short of estimates for the airline operator's third quarter, posting profits of $1.50 per share ($1.52 was expected) and revenue of $14.59 billion ($14.68 billion expected). Delta CEO Ed Bastian cited the CrowdStrike (CRWD) outage to have shaved off $0.45 from the company's adjusted earnings per share. Bloomberg Intelligence analyst George Ferguson explains, "The results are a little bit muddy from CrowdStrike, but labor costs were up 13% year-over-year. So, labor continues to be a big challenge for the airlines. And again, with this revenue, this unit revenue declining, that makes things more challenging." Ferguson highlights the struggle an airline like Delta will face as it strives to grow in the marketplace. Oil prices tick higher (CL=F, BZ=F) as Hurricane Milton made landfall in Florida and amid ongoing geopolitical tensions in the Middle East. Andy Lipow, president of Lipow Oil Associates, explains, “The oil market is pricing in a greater probability of a war between Iran and Israel that would result in a supply disruption. And I should point out that since last year, when Hamas invaded Israel, there has been no oil supply disruption. But prices recently have been rising of a fear that one might happen.” This post was written by Melanie Riehl
Marvin Loh, State Street senior global macro strategist joins Morning Brief to discuss how the tech sector (XLK) will be impacted by the Federal Reserve's rate-cutting cycle. Loh believes that tech will be "one of the bigger beneficiaries" of the Fed's interest rate cuts. He notes that the sector has demonstrated strong earnings growth, and it is one of the few areas of the market that hasn't experienced significant revisions. "So that kind of stronger story is still out there. You know, quality growth generating cash and really defendable moats are kind of where you want to put some of your long-term bets," he tells Yahoo Finance. He is bullish on AI, and believes that the technology will continue to drive valuations higher. Thus, if investors have exposure to these mega-cap AI players, he advises them to "sit tight, hold on," as "the story still has many chapters to be played out." To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. This post was written by Melanie Riehl
Phil Orlando, Federated Hermes chief equity strategist, joins Market Domination Overtime to discuss the state of US consumers. Orlando notes that there is a divergence between upper- and lower-income consumers. Upper-end consumers are holding up "fine" amid inflationary pressures, allowing the Consumer Discretionary sector (XLY) to perform well. However, he explains, lower-end consumers have been "spending less and saving more" as their household budgets get squeezed by high prices. "We are now three months into the back-to-school season. We know what June, July, and August numbers are. We'll find out what the September numbers were later this month. But on the basis of the three months of back-to-school that we have so far, retail sales are up 2% year over year. All right, that doesn't sound too bad. They're positive, but they're also the weakest back-to-school numbers that we've seen in 15 years. You'd have to go back to the depths of the recession during the global financial crisis to find worse back-to-school numbers," Orlando adds. Thus, he notes that the back-to-school retail sales data shows that lower-income Americans are struggling. "That's going to manifest itself into what we believe is slower GDP growth going into the back-end of the year," Orlando concludes. To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here. This post was written by Melanie Riehl.
Tastytrade co-founder Tom Sosnoff argues that investors ought to consider going against the passive grain and investing actively. But he isn't using returns in his argument.
Michaella Gallina, chief financial officer of the consultancy group, Wave HQ, and vice president of investor relations at H&R Block, gives her unique take on value investing.
IAK and KIE are beating the S&P this year even as property damage losses mount.