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Weekly Update 10/24/2025: Earnings Season Continues

Insights
  • Home sales rising
  • Coke reports solid results based on higher prices
  • RTX grows backlog
  • AT&T confirms cash flow targets
  • ...And many more quarterly reports!

 

CPI

While the government shutdown continues, at least one key important economic data point was tabulated and released this week. The consumer price index (CPI) rose 0.3% in September from August according to Bureau of Labor Statistics (BLS). As we highlighted in last week’s writeup, the CPI is an important input in a variety of securities prices and government payouts. This was the impetus behind getting workers back to the BLS to get this data computed. The data showed that underlying inflation rose at the slowest pace in three months. The core rate, which excludes the more volatile food and energy components, was higher by 0.2%. On a yearly basis, the headline and core CPI were up 3.0%, slightly below the 3.1% consensus figure collected in a Bloomberg survey of economists.

Goods prices were slowed by cheaper prices for used cars. Those items more exposed to tariffs, including household furnishings and recreational goods, rose with apparel prices rising at the fastest rate in a year. Services prices excluding energy rose 0.2% thanks to lower airfare prices. A mild 0.1% increase in owners’ equivalent rent, which comprises nearly a quarter of the overall CPI, also helped keep the overall figure down. While companies have reported higher input prices due to levies, the hit to consumers has been uneven. Most of the costs have been absorbed by the company in lower margins. How much longer this will occur is the most pressing question that needs to be answered as the key holiday shopping season approaches. Most of the data collection for September was done before the federal government closed on October 1. Tabulating the figures and applying statistical models to the data is all that had to be done but was not thereby delaying the final release after its initial October 15 date. The BLS has not been able to collect any new data since the start of the month, threatening to delay the October report and potentially subsequent months.    

Existing home sales is computed by the National Association of Realtors. Thus, it is not affected by the government shutdown. Previously-owned homes represent about 90% of all residential mortgage transactions in the country so it is a significant indicator. In September, this metric rose 1.5% to an annual rate of 4.06 million contract closings, the highest in seven months. That was inline with the median estimate of economists surveyed by Bloomberg. The median sales price rose 2.1% from year-ago levels. Mortgage rates started inching lower in August and continued to decline in September. That helped spur buyers to enter the market with the cost of home ownership falling. Rates around 6.4% remain almost double what they were at the end of 2021. Bloomberg economist Stuart Paul had this to say: “Falling mortgage rates are supporting demand, and we expect that to remain the case into 2026. But a normalizing stock of existing homes for sale and bloated inventories of new homes for sale will likely limit price growth in the year ahead.”  

Company Events

SGK writes additional weekly commentary for clients of the firm detailing recent events and earnings of core equity holdings.

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