Market Wraps
Watch For:
World Agricultural Supply & Demand Estimates
Today’s Headlines/Must Reads
– Banks Load Up on $1.2 Trillion in Risky ‘Hot’ Deposits
– Five Things to Look for at Apple’s Tuesday iPhone Event
– U.S. Takes Steps to Free $6 Billion in Iranian Funds in Prisoner-Swap Deal
Opening Call:
Traders appeared reluctant to make bold bullish bets ahead of a batch of potential market catalysts over the next few sessions.
Apple shares were a fraction firmer in premarket action as investors waited to see what the company has in store at its marketing event.
The U.S. consumer price index report for August will be published on Wednesday, followed the next day by August producer prices and retail sales numbers–data that may impact the Federal Reserve’s thinking ahead of its policy deliberations next week and at its next meeting in November.
“[G]iven persistent pressures on service prices, the resurgence of oil prices, and the diminishing impact of favorable base effects, it appears unlikely that headline inflation will return to the desired 2% target any time soon. Hence, the path ahead remains challenging, and the Federal Reserve still faces a lengthy journey in its efforts to stabilize the economy,” SPI Asset Management said.
“U.S. equity markets should likely show their hand this week after recent churning…It’s thought that weaker than expected data could be instrumental for causing Treasury yields to fall, and vice-versa,” Fundstrat said.
“Until there’s a strong breakout in either direction, the trend over the past month has been neutral, not bullish nor bearish. However, breaks of either 4541 to the upside [for the S&P 500], or 4430 to the downside, should be important,” Fundstrat added.
Premarket Movers
Acelyrin fell 56% after the company disclosed that its skin drug candidate’s primary endpoint by week 16 of a Phase 2b/3 trial didn’t meet statistical significance.
Alphabet slipped as the Justice Department’s long-anticipated antitrust case against Google, which accuses the company of illegally monopolizing the internet search market, begins Tuesday in Washington.
Oracle stock was down 9.9% after its CEO told analysts on a conference call that the company expected second-quarter earnings of $1.30 to $1.34 a share on revenue of $12.89 billion to $13.13 billion. Analysts had been forecasting earnings of $1.34 a share on revenue of $13.28 billion.
Tesla declined 1.1%, a day after its shares closed with a gain of 10% following an upgrade to the stock from Morgan Stanley.
WestRock rose 8.3% after formally signing an agreement to be acquired by Dublin-based Smurfit Kappa, a deal that creates a paper and packaging company worth about $20 billion.
Forex:
The dollar steadied after edging lower on Monday and ING said trading should be quiet ahead of Wednesday’s U.S. inflation data, adding that it sees risks of a higher-than-expected core print.
The data will be closely watched ahead of next week’s Federal Reserve decision.
Energy:
Crude futures were firmer as investors awaited forecasts from OPEC and the IEA on oil demand.
Oil’s rally appears to be peaking at around its current levels but tightness in the market could deepen and keep prices supported, analysts said.
“Technical indicators suggest the recent gains may have run their course for the moment. However, signs of tightness in oil products markets could keep pressure on crude oil,” ANZ said.
Later on Tuesday, OPEC is set to release its latest forecast on demand in a monthly report while the IEA publishes its monthly report on Wednesday.
Metals:
Base metals and gold slipped in early trading as the dollar steadied after recent losses.
The market is optimistic about a post-summer pick-up in Chinese metal demand, ING said, noting better-than-expected Chinese credit data signaled stabilization in household demand for mortgages.
Additionally, a Shanghai Metals Market survey showed that “China’s copper cathode production rose 15.5% year-on-year and 6.8% month-on-month to 989,000 tons in August,” ING said.
Today’s Top Headlines
UAW Bends on Wage Demands as Talks Progress in Detroit
The United Auto Workers union is bending on its pay-increase demands, with recent proposals asking for a mid-30% raise, rather than the 40% increase the union initially targeted.
The union is negotiating new four-year labor contracts with Ford Motor, General Motors and Jeep-maker Stellantis. The current contracts expire at 11:59 p.m. ET Thursday, and the UAW has said workers could strike all three companies if tentative agreements aren’t reached by then.
A Mall Owner’s About-Face: Bet on America’s High-End Malls
The European owner of Westfield malls is pulling back from its aggressive plan to sell nearly all its properties and exit from the U.S. market this year, another vote of confidence for the high-end mall business.
Unibail-Rodamco-Westfield said last year that it planned to shed most of its American portfolio by the end of 2023. Now, the Paris-based company intends to hold some of its top-performing malls beyond that self-imposed deadline.
Shari Redstone’s National Amusements Strikes Deal With Lenders
National Amusements, the family holding company of media heiress Shari Redstone, has reached a deal with creditors to restructure some of its debt.
National Amusements paid down 20% of the outstanding, roughly $250 million, loan to its creditors, according to people familiar with the matter. The company, parent of the Paramount movie studio and CBS television network, is obligated to pay down another 15% in March. The creditors, which include Credit Suisse Asset Management, Invesco, Hawkeye Capital and collateralized-loan-obligation funds, also are getting increased interest and collateral on the loan. The agreement extends through 2025.
KKR to Invest Another $250M in Reliance’s Retail Unit
Private-equity firm KKR plans to invest an additional 20.70 billion Indian rupees ($250 million) to boost its stake in the retail unit of the conglomerate Reliance Industries.
The investment will give KKR an additional equity stake of 0.25% on a fully diluted basis, Reliance said in a statement late on Monday. With the latest investment, KKR’s stake in Reliance Retail will increase to 1.42%, the company said.
Small-Caps Are in the Doghouse. What Could Lift Them Out.
Small-cap stocks have struggled this year, but things are looking up for the little guys.
One tailwind is upward earnings revisions, according to RBC Capital Markets.
Amateurs Pile Into 24-Hour Options: ‘It’s Just Gambling’
Lucas Sommer woke up around the time the stock market opened and, still bleary-eyed, opened his Robinhood app.
He had a hunch it would be a good day for stocks, so he scooped up some options contracts that would profit if the tech-heavy Nasdaq Composite Index rose that day.
Biden Administration Takes Steps to Free Up $6 Billion in Iranian Funds in Prisoner-Swap Deal
WASHINGTON-The Biden administration issued a waiver for international banks to transfer $6 billion in frozen Iranian money from South Korea to Qatar without running afoul of U.S. sanctions, a possible step toward the release of five American citizens detained in Iran.
Secretary of State Antony Blinken notified lawmakers of the waiver of certain Iran sanctions, according to a letter to Congress dated Monday. The release of funds is seen as paving the way for Iran to potentially free five Americans and the U.S. to free as many Iranians.
Donald Trump Seeks Recusal of Judge Presiding Over His Federal Jan. 6 Case
WASHINGTON-Former President Donald Trump’s lawyers have asked the judge assigned to his federal election-interference case to recuse herself, saying her previous negative statements about Trump have created the appearance of bias.
In a nine-page motion filed Monday, Trump lawyers John Lauro and Todd Blanche pointed to two sentencing hearings in which U.S. District Judge Tanya Chutkan harshly criticized the Jan. 6, 2021, attack on the Capitol while sentencing convicted rioters. During those hearings, Trump’s lawyers argued, Chutkan suggested that the former president should be prosecuted and imprisoned, making her statements “inherently disqualifying.”
Source: Dow Jones Newswires