Friday, October 15, 2021

Another big day for economic prints is coming with pre-market levels already above yesterday’s close. We are now on a clear bullish path for the week after starting Monday sliding deep into the red. Currently, the Dow Jones is up nearly +200 points, the Nasdaq +52 and the S&P 500 +20 points. This follows Thursday’s gains which pushed indices up to 1.5-1.75% for the ordinary day’s trading session.

Retail sales for September turned to a big positive this morning, + 0.7% against -0.2% expected. This is in fact a decrease from the + 0.9% revised upwards from the previous month, and breaks the recent cycle of “big rise one month, steeper fall next month”. Subtracting volatile month-over-month auto sales, we see this figure climb to + 0.8%, indicating that the recent spike in motor vehicle sales may have subsided. Excluding cars and gasoline, we are back at + 0.7%.

The Import price index, also for September, came out at 10 basis points given the expectations of + 0.4%, but this is a positive variation compared to the -0.3% of the previous month. The lion’s share of the increase came from the energy sector, where oil and natural gas prices rose + 3.7% from a decline of 3.0% in August. Imports excluding fuel remained unchanged last month. Over one year, import prices have risen sharply by + 9.2%.

Also, a new Empire State Manufacturing Index for October came out this morning, hitting +19.8, which is lower than the expected 26.5 and slightly revised 34.3 from the previous month. This productivity measure for New York State has risen and fallen since last summer, but the good news here is that we are a long way from the cycle lows we’ve seen, which hit their lowest point in January. this year, +3.5.

Goldman Sachs Group, Inc. GS is up + 2.5% this morning on a booming Q3 earnings count. The large Wall Street investment bank made $ 14.93 per share, up from the expected $ 9.78 and $ 9.68 per share reported in the quarter last year. Revenue increased $ 13.6 billion for the quarter, or + 26% year-over-year. Even in a third quarter earnings season that brought strong earnings numbers (including JPMorgan, which lacked revenue), no one has done as well as Goldman Sachs yet.

Investment Banking was the biggest winner of the quarter: $ 3.7 billion, compared to $ 2.9 billion expected. Fixed income securities were $ 2.5 billion and stocks were $ 3.1 billion. Goldman posted a fine streak of earnings beats, now eight quarters in a row. The company has only recorded three failures in the past five years. Going into the earnings report, Goldman had a Zacks Rank # 3 (Hold) with a Value-Growth-Momentum score of A.

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