Good News On Energy, But Not So On Retail And Mortgage Rates

Futures dropped a bit as retail sales were weaker than expected, Producer Price Index (PPI), a measure of inflation at the wholesale level, was in line, but core PPI was higher than expected...bottom line is that energy costs are dropping, and this will be a big help in the next quarter.

You can see this with the earnings from CSX : in-line, no big surprises, and most importantly FUEL PRICES DECLINED significantly.

Still, futures declined on this news, probably because the weaker than expected retail sales indicates a negative quarter for GDP.

Another negative: The Mortgage Bankers Association said the average 30 yr mortgage rate moved up to 6.47 percent from 5.98 percent last week. Refi's still rose 12.5 percent, while purchases were little changed. Rates are up because bond yields are moving up.

So good news on energy inflation, bad news on retail sales, bad news on mortgage rates.

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Elsewhere, commodity stocks like BHP Billiton ,Massey, and AK Steel are trading down 5-10 percent pre-open.

However, the earnings reports have been fair to good this morning:

1) JP Morgan posted a gain in earning when a loss was expected, however provisions for credit losses were notably higher than last year in investment banking, retail financial services, card services, and commercial banking. They were not, however, notably higher than expected.

2) Wells Fargo posted higher earnings ($0.49) than consensus ($0.41), as did Wachovia ; both are trading up about 3 percent pre-open. Wells Fargo was the beneficiary of all that panic over bank deposits; they saw a "tremendous" inflow at the end of September.

3) Coca-Cola also posted earnings higher than expected, as opposed to rival Pepsi

4) Intel's revenue guidance ($10.1-$10.9 b, $10.8 b expected) was fair, not great.

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