Stock futures trading mixed amid more earnings and inflation data

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Stock futures rose Wednesday morning as investors digested more corporate earnings results and another batch of inflation data.

Contracts on the S&P 500 have been changed slightly. slightly higher. During Tuesday’s regular session, the leading stock index rose to an intraday record high before pulling back and ending lower. The Dow and Nasdaq also fell, with cyclical areas of the market such as airline and financial stocks posting some of the biggest declines Wednesday morning, and Bank of America (BAC) shares tumbling after the company became the latest major bank to score a mixed second. – Quarterly earnings results, with net income from interest expense down 4% from last year and missing estimates amid lower interest rates.

Concerns about the pace of economic recovery returned to focus this week with the release of a higher-than-expected reading of consumer price inflation, which posted the fastest annual increase since 2008 and suggested that stubbornly high prices could derail the recovery. On Wednesday, the Bureau of Labor Statistics’ producer price index for June posted a 7.3% year-over-year increase, marking the fastest rise ever in data back to 2010.

Analysts are divided over how fleeting inflationary pressures in the market will eventually play out, and how long the Fed will be able to ignore price hikes before making a move on monetary policy. Bank of America’s Alexander Lane wrote in a note to clients that the company does not believe the CPI report is “changing much for the Fed,” while ING economist James Knightley said the explosive inflation reading “makes it increasingly difficult for the Federal Reserve to do so.” The Fed sticks to its position that higher inflation readings are merely “transient.”

Still others are in the mindset that price pressures will subside later this year. To be sure, much of the rise in the June CPI report included an increase in the prices of used cars, trucks and other categories consistent with the only intraday hike reopened by fuel.

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“This inflation is temporary and will start to ease towards the end of the year,” said Brent Schott, chief investment strategist at Northwestern Mutual Wealth Management Yahoo Finance. “There are parts of the economy that have been affected by COVID; those supply chains are still affected. And that’s driving up prices for some aspects of the inflation equation.”

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8:43 a.m. ET: Citi, Wells Fargo outperforms quarterly profit as bank profits surge

A slew of big bank earnings continued into Wednesday morning, with both Citi (C) and Wells Fargo (WFC) publishing reports.

Citi shares surged after the company reported earnings that beat estimates, with earnings per share growing at $2.85 easily above 50 cents per share in the corresponding quarter last year and beating estimates of $1.94. The earnings increase came along with the reserve issuance as the company cut $2.4 billion in credit reserves amid an improving economy, versus an increase of $5.9 billion last year. Under the headline results, Citi showed some weakness in fixed income trading, with revenue in the business unit down 43% year-over-year to $3.21 billion. Light quarterly bond trading returns are in line with trends seen at other major banks including JPMorgan Chase earlier this week.

Meanwhile, Wells Fargo also beat earnings estimates, with earnings per share coming in at $1.38 well above the expected 98 cents. Revenue also outperformed, rising to $20.27 billion from $17.77 billion, led by retail banking and lending.

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8:32 a.m. ET: Producer prices rose by the most in June compared to last year

Producer prices rose much more than expected in June as supply chain restrictions and shortages pushed up input prices for a range of commodities.

The producer price index rose 1.0% in June from May, accelerating from the 0.8% monthly rise in May, according to the Bureau of Labor Statistics. Those estimates beat a 0.6% monthly rise, according to Bloomberg data. About 60% of the increase in the general index came amid a jump in prices in the services sector, with increased demand for the services economy during the reopening, which led to higher prices.

Over the past year, the Producer Price Index rose 7.3%, coming in well above May’s 6.6% rise. This was the fastest rise ever, based on BLS data going back to 2010.

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7:38 a.m. ET: Delta Air Lines narrows losses in the second quarter, sees return to profitability

Delta Air Lines (DAL) posted a lower-than-expected second-quarter loss, with a notable return to leisure travel helping boost the company’s results.

Adjusted losses were $1.07 per share, coming in less than expected $1.42, according to Bloomberg consensus data. Revenues of $6.3 billion exceeded expectations.

Losses before tax of $881 million are down about $2 billion compared to the first quarter of 2021. Ed Bastian told Delta Airlines CEO Adam Shapiro of Yahoo Finance in an interview that he expects the airline to return to profitability in the current third quarter.

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7:13 a.m. ET: Mortgage applications jump by most since January last week as interest rates drop

Mortgage applications increased the most since January last week as at least an intraday drop in interest rates attracted buying and refinancing activities in the housing market.

The Mortgage Bankers Association’s weekly mortgage index rose 16% on a weekly basis during the period ending July 9. Refinancing is up 20% from last week, but it’s still 29% lower than in the same week in 2020. Purchases are up 8%. per week, including a seasonal adjustment for the Fourth of July holiday. On an unadjusted basis, purchases are down 13% week over week and down 29% year over year.

Total orders rose last week, driven largely by increased refinancing as interest rates fell again. “Treasury yields have trended lower over the past month as investors remain concerned about the COVID-19 variant and slowing economic growth,” said Joel Kahn, associate vice president of economic and industrial forecasting at the MBA, in a press release. As a result, mortgage rates fell for the second week in a row, with the 30-year fixed rate at 3.09%, the lowest level since February 2021.

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7:07AM ET Wednesday: Stocks trade mixed ahead of more earnings and inflation data

Here’s where the markets are trading on Wednesday morning:

S&P 500 futures contract (ES=F): 4,364.00, +2.75 points (+0.06%)

Dow Jones futures (YM=F): 34.770.00, -6 points (-0.02%)

Nasdaq Futures (NQ=F): 14,913.75, +0.33 points (+0.33%)

Crude Oil (CL = F): – $0.65 (-0.65%) to $74.76 per barrel

Gold (GC = F): + $6.40 (+0.35%) to $1816.30 per ounce

10-year Treasury (^TNX): -1.7 basis points to gain 1.398%

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6:05 PM ET Tuesday: Stock futures embrace flat line

This is where the markets were trading on Tuesday night

S&P 500 futures contract (ES=F): 4359.75, -1.5 points (-0.03%)

Dow Jones futures (YM=F): 34778.00, +2 points (+0.01%)

Nasdaq futures contract (NQ=F): 14,864.75, -0.25 points (almost unchanged)

NEW YORK, NY – May 11: The New York Stock Exchange stands in lower Manhattan after global stocks plunged as fears grew that rising inflation would prompt central banks to tighten monetary policy on May 11, 2021 in New York City. By mid-afternoon, the Nasdaq Composite had lost 0.6%, after falling 2.2% at its session low. (Photo by Spencer Platt/Getty Images)

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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