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Core PCE Inflation at a 40-Year High in March

New Personal Consumption Expenditure (PCE) index data for the month of March has hit the tape. It’s one of the prime inflation prints informing Fed decisions on monetary policy — the next of which comes just next week. Headline PCE last month came in at +1.4%, ahead of the +0.6% initially reported for February.

Year over year PCE managed to hit a 40-year high: +6.6%, above the originally reported +6.4% for February. Stripping out volatile food and energy products, the “core” read on March PCE came in at +5.2% — a tad lower than the +5.3% expected and the +5.4% initially reported the previous month. This illustrates that inflation was clear and present in March, but a large chunk of it was due to food and energy prices.

Real Personal Spending reached +0.2%, swinging to a positive from -0.1% expected and -0.4% in February. As we saw in the initial read on Q1 GDP earlier this week, the consumer appears to be doing his/her part in keeping the economy strong. Clearly, ratcheting down energy costs — which subsequently affect food costs due to deliveries, etc. — would go a long way toward staunching inflation. A 50 basis-point interest rate hike next week from the Fed will also play a part in this.

Exxon Mobil XOM missed estimates on its Q1 earnings this morning, with $2.07 per share coming up short of the $2.25 expected in the Zacks consensus. Much of this has to do with a -$3.4 billion write-off in doing its part to boycott Russian oil. Revenues in the quarter beat estimates by +1.8% to $90.5 billion, and is miles ahead of the year-ago $59.15 billion in revenues. Shares are flat on the news; the stock is +42% year to date.

Colgate-Palmolive CL posted only its second earnings miss in the past five years — though three of the previous four quarters just came in-line with expectations — with 74 cents per share shy of the 80 cents anticipated. Sales in the quarter of $4.4 billion were slightly shy of expectations, but slightly above the year-ago tally. Shares are down -5% on the miss, adding to the -5% year to date for the Consumer Staples giant.

Bristol Myers-Squibb BMY took out estimates on both top and bottom lines for the third time in the past four quarters: earnings of $1.92 per share easily surpassed the $1.74 expected, on $11.65 billion in revenues, which topped estimates by +3.5%. However, reduced earnings estimates for the Big Pharma company for the full year are taking down shares -5% ahead of the opening bell.

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