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Stocks Tick Up After Goldman Earnings Soar, But Key Economic Indicator Shows Consumer Worries

Stocks Tick Up After Goldman Earnings Soar, But Key Economic Indicator Shows Consumer Worries

Topline

Stocks barely budged Wednesday morning after a mixed bag of pre-market earnings results revealed that the economic recovery is still suffering from weak fundamentals.

Key Facts

As of 9:35 a.m., the Dow Jones Industrial Average had edged up .1%, while the S&P 500 and the tech-heavy Nasdaq ticked up .2% and .5%, respectively.

Shares of Goldman Sachs climbed 1% after the New York-based investment banking giant reported $3.5 billion in profits and a 30% surge in revenue fueled by the mid-pandemic trading boom. 

Bank of America, on the other hand, failed to impress investors, posting mixed results for the third quarter that beat analysts expectations on profits, which totaled $4.9 billion, but fell behind on revenue expectations; its shares are down nearly 3%.

Wells Fargo shares are down 3% after reporting a 56% drop in quarterly earnings due to decreased interest income in light of historically low interest rates, the firm said.

Global markets were also fairly tepid on Wednesday: As of market open, the United Kingdom’s FTSE 100 had fallen .4%, and France’s CAC 40 was virtually flat, while Japan’s Nikkei 225 ended Wednesday up just .1%.

The consumer price index for September–a key measure of inflation–came in slightly below expectations, rising .19% during the month and leading to an unchanged year-over-year rate of 1.7%.

Key Background

The Covid-19 pandemic threw the economy into a deep recession, and Federal Reserve Vice Chairman Richard Clarida said Wednesday morning that the U.S. economy needs another year–or maybe more–until it fully recovers. The recovery thus far has been marked by slowed job growth, layoffs that remain high and a volatile stock market that’s been rocked in recent weeks by mounting uncertainty around

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A Wall Street chief strategist says US lawmakers need a deal on fiscal aid – even a small one will help save consumer spending

A Wall Street chief strategist says US lawmakers need a deal on fiscal aid – even a small one will help save consumer spending

FILE PHOTO: Traders gather at the booth that trades Abbott Laboratories on the floor of the New York Stock Exchange, December 10, 2012.   REUTERS/Brendan McDermid
Traders gather at the booth that trades Abbott Laboratories on the floor of the New York Stock Exchange


  • Crossmark Global Investment’s chief market strategist Victoria Fernandez told CNBC’s “Trading Nation” Tuesday US lawmakers need to decide on a fiscal package, even if it is smaller in size, to save consumer spending.
  • She said consumers have almost spent their consumer checks which is worrisome going into the holiday season. 
  • “Even if it is a smaller number, or a one-time check, it is going to give support to that consumer as we go into the last quarter of the year and that is where you need to start looking at your portfolio to balance that out a little bit,” she said. 
  • She said investors should look at a combination of growth and value stocks, as well as different segments of the financial services sector to weather uncertainty. 
  • Visit Business Insider’s homepage for more stories.

US lawmakers need to decide on a fiscal stimulus package, even if it is a smaller one, to prop up consumer spending, particularly going into the holiday shopping period, Victoria Fernandez, chief market strategist at Crossmark Global Investments told CNBC’s”Trading Nation” Tuesday 

“We really need that consumer to hang in there. For that to happen, we will need to see another round of stimulus, even if it is a smaller deal, or not the $600 we saw before,” she said. “Even if it is a smaller number, or a one-time check, it is going to give support to that consumer as we go into the last quarter of the year and that is where you need to start looking at your portfolio, to balance that out a little bit.”

With around 10 million Americans still out of work, many consumers will have long since spent their

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Used vehicles lift U.S. consumer prices, but inflation slowing

Used vehicles lift U.S. consumer prices, but inflation slowing

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. consumer prices increased for a fourth straight month in September, with the cost of cars and trucks rising by the most since 1969, though inflation is slowing amid labor market slack as the economy gradually recovers from the COVID-19 recession.

While the benign report from the Labor Department on Tuesday will have no direct impact on monetary policy, it should allow the Federal Reserve to keep interest rates near zero for a while and continue with massive cash infusions as it nurses the economy back to health.

The U.S. central bank is now more concerned about the labor market and has embraced flexible average inflation targeting, which in theory could see policymakers tolerate price increases above its 2% target for a period of perhaps several years to offset years in which inflation was lodged below its goal.

At least 25.5 million people are on unemployment benefits.

The consumer price index rose 0.2% last month after gaining 0.4% in August. The CPI advanced 0.6% in both June and July after falling in the prior three months as business closures to slow the spread of the coronavirus weighed on demand.

A 6.7% jump in the prices of used cars and trucks accounted for most of the increase in the CPI last month. That was the biggest gain since February 1969 and followed a 5.4% advance in August. There were also increases in the costs of new vehicles and recreation. But prices for motor vehicle insurance, airline fares and apparel fell.

In the 12 months through September, the CPI increased 1.4% after rising 1.3% in August. Economists polled by Reuters had forecast the CPI climbing 0.2% in September and rising 1.4% year-on-year.

Excluding the volatile food and energy components, the CPI rose 0.2% last month after

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7 Consumer Stocks for an Impenetrable Defense: AAPL, KR, OLLI, SAM

7 Consumer Stocks for an Impenetrable Defense: AAPL, KR, OLLI, SAM

As consumers, we can all possibly tell stories of how the pandemic has affected our lives — including confidence in the economy, spending habits, and life choices since March. The current news headlines on the second wave of the novel coronavirus outbreak worldwide are likely to affect consumer sentiment and spending this fall and winter. Therefore, let’s look at seven consumer stocks for an impenetrable defense even if moods ebb and flow.

How do consumers feel about the state of the economy and its future? In addition to anecdotal evidence and news headlines, economists conduct regular surveys and construct indices that may help gauge the sentiment. For example, the Organisation for Economic Co-operation and Development (OECD) — which has 37 member countries including the U.S. and other developed economies — publishes a “Consumer confidence index (CCI),” whose long-term average is 100. In May, it fell to a multi-year low of 97.67. And the reading for September stands at 98.51.

Moreover, in the U.S., the University of Michigan’s Consumer Confidence Index and the Conference Board Consumer Confidence Index are measures of public confidence. That said, recent results from both indices also show similar readings. So, although consumers are feeling better compared to earlier in the year, the sentiment is still subdued.

Typically, how the Main Street feels affects what happens on Wall Street. For example, the S&P 500 bottomed out on March 23, having decreased close to 35% from its level on Feb 19. Since then, broader markets and shares of many companies have risen sharply. In fact, a large number of stocks hit new highs by early September. The S&P 500 index also saw an all-time high on Sept. 2. But, the indices have been consolidating since.

Yet, it is hard to know how broader markets mare fare in the

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U.S. consumer inflation muted, just don’t buy a used car

U.S. consumer inflation muted, just don’t buy a used car

By Dan Burns

(Reuters) – U.S. consumers on balance paid only a little bit more for goods and services last month as supply chain disruptions that contributed to a bump up in inflation over the summer began to ease, a welcome respite for the millions who remain unemployed.

While that easing pressure on pinched consumers might offer a benefit to Republican President Donald Trump’s reelection prospects against Democratic challenger Joe Biden, it does come with a big “on the other hand” caveat: It is the latest sign of fading momentum in the rebound from this spring’s record-setting economic slump.

A bit of inflation typically is an indication of strengthening demand, an encouraging signal that consumers have reliable sources of income allowing them to contribute to growing an economy that hinges extensively on their spending. But with roughly 11 million still out of work and desperate for a new round of COVID-19 relief from Washington, September’s modest uptick in prices is no such signal.

Here’s Jefferies chief financial economist Aneta Markowska’s take: “After several months of above-trend gains, price pressures are finally normalizing. Both headline and core CPI increased by just 0.2% (month-to-month) in September, with the underlying details painting an even weaker picture.”

Graphic: September CPI: All about used vehicles https://fingfx.thomsonreuters.com/gfx/mkt/azgvojwqepd/Pasted%20image%201602602548532.png

In fact, she notes prices would have been unchanged but for one thing: The largest monthly increase in used car and truck prices since 1969. And with cash-strapped consumers increasingly reliant on their own transport to get to an on-site job, that’s no welcome development.

Food price increases, too, are moderating after a big run up in the spring, but where you eat makes a big difference.

If eating at home, as millions without work have no choice but to do, then food prices were lower for a third

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