Market Wraps
Watch For:
Leading Indicators for July; Weekly Jobless Claims; Earnings from Walmart
Today’s Top Headlines/Must Reads:
– China Demands U.S. Lift Steel, Aluminum Tariffs After WTO Ruling
– In China, Bidding Wars for Lithium Top Out at 1,300 Times the Starting Price
– Alphabet’s Verily Plans Cost Cuts Amid Pressure on Other Bets to Rein In Spending
Opening Call:
Bonds have resumed command of the stock market of late, and with yields continuing to rise in early Thursday trading it has left equity futures struggling to rally with any conviction.
Recent economic data and Fed comments “has led some investors to reconsider whether the fact that markets had been pricing in victory against inflation came too early, and in any event whether higher rates could remain in place for longer than had been anticipated,” Interactive Investor said.
Global markets were broadly lower. Shares of industrial and construction companies weighed on the Stoxx Europe 600, while Japan’s Nikkei 225 index fell 0.4%. Chinese stocks stabilized and the Shanghai Composite added 0.4%, after a four-day losing streak driven by mounting difficulties in the world’s second-biggest economy, particularly in housing.
Pre-Market Movers
Ball rose more than 5%, after it struck a $5.6 billion deal to sell its aerospace business to the U.K.’s BAE Systems.
Cisco Systems may offer some support to the technology sector, with its shares up almost 3% in premarket action after it reported strong quarterly results.
Hawaiian Electric Industries fell 12% after WSJ reported the utility was in talks with restructuring firms to explore options to address its financial and legal challenges arising from the Maui wildfires.
United States Steel was up 1.1% after a report said ArcelorMittal was considering making a bid for U.S. Steel. Cleveland-Cliffs and Esmark are confirmed bidders for U.S. Steel. Both bids are $35 a share. The Cleveland-Cliffs bid is cash and stock; the Esmark bid is all-cash.
VinFast fell about 10%, setting it up for a second down day after a blockbuster debut Tuesday that on paper made it more valuable than General Motors or Ford Motor.
Wolfspeed swung to a quarterly loss, hurt by $39.5 million in factory startup costs. The stock dropped more than 14%.
Wednesday’s Post-Close Movers
Avnet posted higher sales and a better-than-expected adjusted profit for its fiscal fourth quarter. The company’s quarterly sales were lifted by gains in its Americas and Europe, Middle East, and Africa regions that offset a decline in Asia. Shares rose 6%.
Chesapeake Energy is joining the S&P MidCap 400 index, replacing Mercury Systems, which is moving to the S&P SmallCap 600 index, taking Arconic’s place. Apollo Global has agreed to buy Arconic. Shares of Chesapeake Energy rose more than 5%.
Forex:
The dollar is likely to rise further after minutes of the Fed’s July meeting showed policymakers continued to see significant upside risks to inflation, KBC Bank said.
This could cause the euro to drop imminently below its July low at $1.0833, as the dollar holds its momentum.
“We remain flabbergasted by the fact that U.S. money markets only attach a 1/3 probability for a final Fed rate hike by November despite this clear Fed guidance.”
Energy:
Oil markets steadied, and ING said fundamentals remained largely constructive as cuts from OPEC+ should mean inventories will be drawn down later this year.
Metals:
Base metals were higher, but Peak Trading Research said it’s a very bearish macro environment.
Today’s Top Headlines
This Gen-Z Lemonade Might Sour
This column is part of the Seventh Annual Heard on the Street stock-picking contest.
When life gives you lemons, Silicon Valley may not have the best recipe to make lemonade.
Paramount Drops Plans to Sell BET Stake
Paramount Global has dropped its plans to sell a majority stake in its BET Media Group, which includes the VH1 and BET cable networks and BET+ streaming service, according to people familiar with the situation.
The company notified bidders Wednesday evening that it decided to end the sale process because it concluded that a sale wouldn’t result in any meaningful deleveraging of its balance sheet, the people said.
Already Time to Hit the Brakes on VinFast
This column is part of the seventh annual Heard on the Street stock picking contest.
There is next to no chance that Vietnamese electric-vehicle startup VinFast Auto can live up to its overcharged stock-market debut.
Norway Central Bank Lifts Key Rate to 4.0%, Sees Further Hike in September
Norway’s central bank raised its key policy rate on Thursday and said that another increase is likely next month as inflation remains above target.
Norges Bank increased its key policy rate by 25 basis points to 4.0%, in line with a Dow Jones poll before the decision.
Stock-Market Rally Makes More 401(k) Savers Millionaires
The number of people with at least $1 million in their 401(k) accounts has grown about 25% so far this year.
Some 378,000 retirement savers in Fidelity plans had seven-figure-plus balances as of June 30, up from 299,000 at the end of 2022. The number of IRA millionaires increased by a similar percentage to nearly 350,000 on June 30, the nation’s largest retirement-plan and individual retirement account provider said.
Russia’s War-Torn Economy Hits Its Speed Limit
The Russian central bank’s jumbo interest-rate increase to halt a tumbling ruble this week points to a new reality for the Kremlin: Russia’s economy has reached its speed limit.
The government has flooded the Russian economy with money to keep its troops in Ukraine supplied and insulate its businesses and citizens from the war. Thanks to the state’s largess, demand in the economy is rising, helping it recover from last year’s sanctions-induced recession. Supply-increasingly constrained by Russia’s isolation and widespread labor shortages-isn’t.
Camp David Summit to Unite U.S., South Korea, Japan
WASHINGTON-A new trilateral alliance linking the U.S., South Korea and Japan will enhance cooperation among the nations in key areas, including ballistic-missile defenses, to counter rising threats from North Korea and China.
The leaders of the U.S. Japan and South Korea are meeting Friday at Camp David, where they are expected to announce details of the agreement, which will also cover intelligence sharing, supply chains and cybersecurity.
Ecuador’s Newest Candidate Also Fears for His Life
Five days before Ecuador’s presidential election, Christian Zurita takes the kind of precautions that were once unheard of for a politician in Ecuador.
Zurita is now running for president in place of his close friend, Fernando Villavicencio, who was assassinated last week amid spiraling drug-related violence. And so anytime he leaves his Quito home, Zurita said, he dons a bulletproof vest, moves inside a tight pack of police bodyguards, and ducks into an armored car.
Source: Dow Jones Newswires