The BLS Producer Price Index (), measuring wholesale prices, surprised to the downside, showing a zero percent increase in prices for June. came in lower than what all 50 forecasters in Bloomberg’s survey predicted. To wit, both the and headline figures were 0.20% below estimates.
Notably, the headline PPI for the last three months has averaged near 0%, while the is less than 0.1%. Year over year, PPI is down to 2.3%.
This data challenges the idea that tariffs are an inflationary force, as producer prices are a key indicator of cost pressures that manufacturers could pass through to consumers. Instead, the weak PPI data suggests that supply chains and production costs are absorbing tariff impacts without triggering widespread price hikes.
While tariffs will affect specific sectors, the broader inflation narrative appears overstated thus far. PPI and should give the Fed a little more confidence that any tariff impact may be less than they initially feared.
The graph below shows that the is now at the lower end of the range that prevailed before the pandemic. Moreover, is closer to the average of its pre-pandemic range.
Bank and Broker Earnings Beat, But Shareholders Want More
Bank and broker earnings generally beat expectations; however, their share prices retreated. Below is a summary of the major bank and broker earnings:
- (NYSE:): EPS of $4.96, beating estimates of $4.48, with revenue of $44.91 billion against $43.8 billion expected. JPM shares fell due to a weak Net Interest Income (NII) outlook and increasing expenses.
- (NYSE:) outperformed, reporting an EPS of $1.96 versus the expected $1.60 and revenue of $21.67 billion, compared to the expected $21.0 billion. Furthermore, they boosted their outlook for full-year revenue and NII.
- (NYSE:) posted an EPS of $1.60, topping the $1.41 estimate, and revenue of $20.82 billion, slightly above forecasts. However, its stock fell 5.48% because it trimmed its full-year NII outlook.
- (NYSE:) reported net revenue of $14.58 billion versus expectations of $13.51 billion. Similarly, its EPS of $10.91 surpassed expectations of $9.59. Equity trading revenues rose 36% to $4.3 billion, and investment banking fees were up 26% to $2.19 billion.
- (NYSE:) reported a solid Q2, with EPS of $12.05, exceeding the $10.79 estimate, and assets under management (AUM) reaching a record $12.53 trillion. However, it missed slightly on revenue and inflows. The stock fell by 6%
Overall, the biggest players in the financial sector posted good results despite stubbornly high rates. Most benefited from increased trading volumes and IPO activity. However, headwinds from tariff-related concerns, slowing economic activity, and generally cautious forward guidance tempered shareholder optimism. The , led by the stocks listed above, fell 1.7% yesterday but remains perched near record highs.