CPI Rises to Meet Expectations
After two months of falling prices (known as disinflation for the economically-inclined), the U.S. consumer price index increased 0.2% in October, in line with analyst expectations. Increasing prices = inflation, which, according to the Federal Reserve, is necessary for a healthy economy. A strong dollar and lower oil prices had held inflation down for the past two months, but gas prices actually rose 0.4% in October and costs of other goods increased as well. The central bank’s 2% inflation target is still far from reality, but it’s likely that October’s positive reading will give the Fed further cause to raise interest rates come December.
Wal-Mart Beats the Odds
Yesterday, Wal-Mart reported earnings that handily beat expectations—although to be fair, they had previously lowered profit estimates, making the earnings beat a bit deceptive. Nonetheless, the story was simple: U.S. sales staged a healthy increase on a surprising 1.7% boost in customer traffic, helping offset weak international sales and rising costs due to paying its employees higher wages. Shares jumped nearly 4% following the results, but remain down 31% on the year.
American Airlines Revises Rewards
Yesterday was another bad day for many airline travelers: American Airlines announced changes to its loyalty program. Instead of rewarding passengers based on miles flown, the airline will now reward based on dollars spent, copycatting the loyalty programs of Delta and United, American’s largest competitors. Through this shift, American’s highest-spending customers will reap more rewards, while budget travelers will score less benefits per flight. Despite American’s goal to increase its bottom line through these revisions, shares dropped 1.2% following the announcement—and so did the hearts of many budget travelers.
TODAY IN TECH
Startup Valuations Up, Investors Skeptical
Despite weak markets and severe economic uncertainty, 86% of tech startups increased their valuations in the third quarter of 2015. Yes, the price tag keeps rising on these soon-to-be IPOs, while the tech sector as a whole remains flat—and private investors are starting to push back. Specifically, big name private tech companies like Snapchat and Dropbox are in the crosshairs, as evidenced by the uptick in senior liquidation preferences. Fancy words, but investors are essentially demanding higher levels of protection on their venture capital investments. In these frothy markets, who wouldn’t?
- Germany-Netherlands match canceled after “concrete” bomb threat
- Air Liquide to acquire Airgas for $10.3 billion
- Canadian Pacific bids for Norfolk Southern
- Charlie Sheen says he’s HIV-positive
- Monday: Dillard’s Earnings
- Tuesday: Consumer Price Index; Walmart, Home Depot, Dick’s Sporting Goods Earnings
- Wednesday: Fed Minutes; Housing Starts; Lowe’s, Target, Staples Earnings
- Thursday: Best Buy, Gap Earnings; Weekly Jobless Claims
- Friday: Abercrombie & Fitch, Foot Locker Earnings