Claims Rise Above Estimates

The Department of Labor reported that the producer price index (PPI) for final products remained unchanged in July. The Zacks Consensus Estimate was for an increase of 0.1%. The metric for July was revised downward from a decline of 0.3% to a decline of 0.1%. The headline PPI increased 4.7% annually last month.

Core PPI (excluding volatile food, energy and trade services) rose 0.4% in July, above the Zacks Consensus Estimate of 0.3%. The metric for June was 0.1%. Core PPI also increased 4.7% annually in July.

Falling Crude Prices and Yields

Crude oil prices fell today following a warning from the International Energy Agency (IEA). On Aug. 12, IEA stated that global crude oil demand this year is set to fall more than previously expected. Both the international benchmark – Brent crude – and the U.S. benchmark – WTI crude – fell around 2% this morning.

The Persian Gulf Strait Authority said “the Strait of Hormuz remains blocked and will not be reopened until Iran’s conditions are accepted.”  Traffic through this crucial crude oil transport channel sank to a 3-month low.

Following benign inflation data and falling crude oil prices, yields on U.S. government bonds of different maturities declined. The yield on the benchmark 10-Year U.S. Treasury Note fell by 2 basis points. The yield on the short-term 2-Year U.S. Treasury Note also fell by 2 basis points. The yield on the long-term 30-Year U.S. Treasury Note fell by 1 basis point.

The Department of Labor reported that initial claims increased by 9,000 to 209,000 for the week ended Aug. 8, above the Zacks Consensus Estimate of 203,000. The previous week’s data was revised marginally upward to 200,000 from 199,000 reported earlier.

Continuing claims (those who have already received government aid and reported a week behind) decreased 22,000 to 1.777 million for the week ended Aug. 1. The previous week's level was revised downward by 2,000 to 1,799,000 from 1,801,000 reported earlier.

AI-Led Earnings in Focus: CSCO, COHR, CBRS

Cisco Systems Inc. CSCO came up with quarterly adjusted earnings of $1.22 per share, beating the Zacks Consensus Estimate of $1.17 per share. This compares to earnings of $0.99 per share a year ago. The AI-powered networking giant posted quarterly revenues of $17.25 billion, surpassing the Zacks Consensus Estimate by 2.36%.

Coherent Corp. COHR reported quarterly adjusted earnings of $1.74 per share, outpacing the Zacks Consensus Estimate of $1.62 per share. This compares to earnings of $1 per share a year ago. The optical and photonics products behemoth registered quarterly revenues of $2.05 billion, surpassing the Zacks Consensus Estimate by 2.66%.

Cerebras Systems Inc. CBRS came up with a quarterly adjusted loss of $0.04 per share, narrower than the Zacks Consensus Estimate of a loss of $0.21per share. This compares to breakeven earnings a year ago. The Ai computing bigwig reported quarterly revenues of $209.87 million, outpacing the Zacks Consensus Estimate by 8.09%.

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This article originally published on Zacks Investment Research (zacks.com).

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