Morning Report: Earnings season kicks off

Vital Statistics:

S&P futures3,70117.75
Oil (WTI)87.26-1.84
10 year government bond yield 3.86%
30 year fixed rate mortgage 6.98%

Stocks are higher this morning after yesterday’s dramatic turnaround. Bonds and MBS are up.

Yesterday’s turnaround was quite dramatic. The S&P 500 briefly broke below 3,500 on its way to a close around 3,670. The 10 year briefly touched 4.05% and this morning yields are back where they were before yesterday’s hot CPI print. The yield curve continues to invert, with 2s-10s now negative 53 basis points.

The strong CPI print from yesterday caused the December Fed Funds futures to price in another 25 basis points in tightening. Pre-report, the consensus was a 75 basis point hike in November and 50 in December. Now we are looking at 75 at both meetings.

JP Morgan reported better-than-expected earnings this morning as third quarter earnings season begins. Mortgage volume declined 45% on a quarter-over-quarter basis to $12.1 billion. A year ago, the company did $41.6 billion in originations in the third quarter, which means JPM’s volumes are down 70% YOY.

Overall revenues rose 7% QOQ and 10% YOY, while earnings per share increased 13% QOQ but fell 17% YOY. JPM is up about 2% pre-open.

Wells reported weaker-than-expected numbers, however there are some special items (litigation expense) that are making comparisons difficult. Q3 mortgage origination volume came in at $21.5 billion, which was down 37% QOQ and 59% YOY.

Despite the miss, Wells is up 5% pre-open.

Retail sales were flat in September, according to the Census Bureau. These numbers are not adjusted for inflation. On a year-over-year basis they rose 8.2%, which more or less matches yesterday’s CPI report.

Consumer sentiment improved in October, according to the University of Michigan Consumer Sentiment Survey. Unfortunately, expectations for the year-ahead inflation rate rose to 5.1%. The Fed pays close attention to this number, so this will encourage the Fed to keep pumping the brakes.

35 Responses

  1. The insanity that is California knows no bounds.

    Democratic California Gov. Gavin Newsom signed a measure into law last month that doesn’t allow businesses to sell products for women at a higher price than they are sold to men.
    The law, AB 1287, states that a business or other entity “shall not charge a different price for any two goods that are substantially similar if those goods are priced differently based on the gender of the individuals for whom the goods are marketed and intended.”


  2. This is proof God loves us!

    The excitement will cause me necrosis but it will have been worth it!


  3. This seems to confirm US involvement.


    • Well that, and the moronic media narrative that Russia decided to blow up its own pipeline instead of turning off the supply.


  4. Lol!


    • Of course. They know what communism is and want no part of it.

      This makes them useless to democrats.


    • “Gov. Kathy Hochul, Mayor Eric Adams laud Biden administration’s move to limit migrants crossing Southern border

      By Marcia Kramer
      October 13, 2022 / 6:21 PM / CBS New York

      NEW YORK — As the Biden administration takes the first steps to reduce the number of people entering the United States at the Mexican border, Gov. Kathy Hochul is taking a victory lap, saying it is the result of intense lobbying on the part of herself and Mayor Eric Adams.”

      And Abbot is thus vindicated.


  5. The responses are hilarious. They run in one of two ways – “Trump’s to much of a coward to testify” or “No way can they allow Trump to

    I hope Trump does as he’s going to be charged with multiple felonies regardless.


  6. Worth noting:


    • What an absolutely condescending and arrogant cocksucker. Reading Bruni is like reading a McConnell press release. FOAD ya big turd!

      For the record Frank, Buffoon and Baboon and awfully close.

      Fucking bigot!


      • Yeah, but if he thinks Walker had a good night at the debate and can win, that means that the truth is actually worse for the Democrats.

        I thought this was a good observation:

        “Rather than Warnock trying to make Walker answer for his alliance with the former president, Walker insisted that Warnock defend his with the current one — a dynamic that doesn’t exactly track with media coverage of the midterms. We keep wondering how much Trump will wound Republican candidates. Warnock seemed plenty worried about how much Biden would wound him.

        So when he was asked whether Biden should run again in 2024, Warnock conspicuously dodged the question.”


  7. One of the best Taibbi pieces I’ve read:

    “On the Loony Van Gogh Protests

    We were warned about this in Fahrenheit 451
    Matt Taibbi”


  8. Update in the Matrix.


  9. I know it’s a dickish thing to say but Gretchen Whitmer looks like Katelyn (Bruce!) Jenner.


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