Stocks rose Monday ahead of inflation data and earnings reports due this week and as travel restrictions expire in the U.S.
The crypto market rose as well, with Bitcoin nearing its all-time high, while Ethereum set an all-time high and Solana pulled back some following an extended rally. In coin-related stocks, Coinbase's (COIN) is expected to report earnings after the close Tuesday.
Tesla (TSLA) shares dipped after results from an Elon Musk Twitter poll showed respondents favor him selling 10% of his Tesla stock. Meanwhile, The Trade Desk (TTD) rose 29% after the company beat earnings and revenue estimates, helped by a rise in data-driven advertising.
Looking ahead at this week, investors will be keeping an eye on travel stocks and inflation reports, while continuing to navigate earnings reports.
Inflation
Inflation data takes center stage this week as investors await readings for both producers and consumers. Producer prices have been on an upward trend throughout the pandemic as labor and material shortages, as well as supply chain disruptions, have persistently sent prices higher. Meanwhile, Consumer prices have also been on a steady rise as some of those price increases get passed on to consumers, prices for housing and cars rise, and some items, like airfares that were severely discounted during the pandemic, recovFor October, economists are expecting that inflation picked up its pace, with a 0.4% rise in the core Producer Price Index. This would follow a 0.2% rise in September. Including food and energy, producer prices are expected to show a sharper rise of 0.6%, following September’s 0.5% rise.
If these estimates hold true, they would underscore the persistence of the aforementioned shortages and disruptions by breaking the recent trend as producers had been facing slower-paced price growth since June.
On the consumer side of things, Wednesday’s CPI report is expected to show consumer prices in October having picked up. Economists are expecting a 0.4% rise in consumer prices, which would follow September’s rise of 0.2%. Meanwhile, core consumer prices are expected to rise 0.6% following a 0.4% rise in September.
This report will be interesting for consumers because even though it is far too early for Christmas music in stores, holiday sales and spending are starting to pick up, as 31% of consumers reportedly planned to begin shopping before Halloween.
Supporting this, Bank of America (BAC) economist Michelle Meyer noted that supplies retailers, such as housing and furnishing and apparel, may have started offering sales in October to capitalize on the early shopping.
While that implies price decreases, the scope of those decreases is likely pretty limited. In the ISM Non-Manufacturing Index report last week, the Prices index for October reached its second-highest ever reading, while respondents reiterated the impact of rising prices throughout the report.
Oreo maker Mondelez (MDLZ) and Clorox (CLX) both underscored the passing of prices to consumers with their announced price increases. Mondelez reported on Yahoo Finance Live that it will increase prices by 6 or 7%, while Clorox expects price increases to start on about 50% of its portfolio - with most of that starting in November - and that its scope will expand to about 70% of its portfolio by the end of fiscal 2022.
Travel Stocks
One group of stocks that we will be watching this week is travel-related stocks as government travel restrictions are lifted today, following last week’s bullish push following interim data released from Pfizer’s (PFE) Phase 2/3 trial on its oral treatment for Covid-19.This could be enough to keep the bulls running with travel-related stocks for the meantime, especially following Airbnb’s earnings report, where Brian Chesky, CEO and co-founder of Airbnb (ABNB) said the company saw “a 44% spike in nights booked for stays, crossing borders coming into [the] United States” during the week following the Biden Administration’s announcement that borders will be reopened.
Through this first week of November, travel has shown to have recovered all but 20.23% of travelers, according to the TSA checkpoint travel numbers. This opens the door to airlines starting to recover toward full demand as 22.9% of total annual passengers in 2019 were from international flights, according to the Bureau of Transportation Statistics.
Economic Events this Week
Tuesday - 10:00 a.m. - PPI and Core PPIWednesday - 8:30 a.m.- CPI and Core CPI - 8:30 a.m. - Initial & Continuing Claims - 10:30 a.m.- EIA Crude Oil Inventories
Friday - 10:00 a.m. - Preliminary University of Michigan Consumer Sentiment report