It was a mixed session for stocks as European equity markets ended lower on the session but higher on the week and US stocks seem to be following a similar path.
According to the data from the University of Michigan consumer sentiment for the US increased for a second month to 72.6 in July of 2023, the highest level since September of 2021, and well above forecasts of 65.5, preliminary estimates showed.
Both current economic conditions (77.5 vs 69) and consumer expectations (69.4 vs 61.5) improved, largely attributable to the continued slowdown in inflation along with stability in labor markets. Still, inflation expectations edged slightly higher for the year ahead (3.4% vs 3.3%) and the five-year outlook (3.1% vs 3%).
Overall, sentiment climbed for all demographic groups except for lower-income consumers. The sharp rise in sentiment was largely attributable to the continued slowdown in inflation along with stability in labour markets. Sentiment is now about halfway between the all-time historic low of 50 from June 2022 and the February 2020 pre-pandemic reading of 101.
Year-ahead inflation expectations were little changed, inching up from 3.3% in June to 3.4% in July and down from the high point of 5.4% from April 2022. Long-run inflation expectations were also virtually unchanged from June at 3.1%, again staying within the narrow 2.9-3.1% range for 23 of the last 24 months.
The final survey result will be released on Friday, July 28, 2023, at 10am ET. The preliminary data was obtained before the better-than-expected CPI and PPI data, so we do need to factor this in.
JP Morgan released earnings data which showed a beat of $4.37 versus $4 expected on revenues of $41.3 billion versus $38.96 billion. Shares are currently up $4.24 or 2.85% in premarket trading at $153.11.
That’s all-time high reached $172.71 back in October 2021. For the year, the stock was up 11% at the close yesterday. That is less than the S&P index, but relatively speaking it is beating its appears.
Jamie Dimon the CEO noted “The headwinds in the economy are substantial and somewhat unprecedented” and “the company has been over earning on credit for some time.”