Coffee With Greta: Stocks Are Slip Slidin’ Away
DJIA Futures: -45 (-0.1%)
SPX Futures: -5 (-0.1%)
NASDAQ Futures: -0.3 (-0.0%)
Good morning friends!
Futures are mostly lower amid continued fears over higher rates.
Let’s get right to it!
Fed Officials Hit the Speaking Circuit
The market is still laser-focused on expectations the Fed will continue aggressive rate hikes.
And traders may get some insight into the upcoming meeting as several Fed officials have speeches scheduled over the next few days.
Cleveland Fed President Loretta Mester speaks at 10:00 a.m. ET today with Fed Vice Chair Lael Brainard speaking at 12:35 p.m. ET.
The Fed also releases its latest Beige Book at 2:00 p.m. ET.
That report is a survey of economic conditions across all 12 Fed districts.
CME Group’s FedWatch Tool shows the market pricing in an 82% chance of another 0.75% rate hike later this month.
Apple iPhone Event Kicks Off Today
Apple (AAPL) shares are up 0.02% ahead of the open as the tech giant is set to hold a launch event today.
The company is expected to unveil new iPhone models at that event.
The rumored devices include 2 sizes of the iPhone 14 and 2 sizes of the iPhone 14 Pro.
Apple is also expected to unveil the Apple Watch Series 8 and a new Pro model of the watch.
The event will also see the public release of iOS 16 which Apple has been testing over the summer after announcing it in June.
Google CEO Hints About Job Cuts
Alphabet (GOOGL) shares are down 0.3% in premarket trade after the CEO said he hopes to make the company 20% more efficient.
Speaking at a conference in Los Angeles, Sundar Pichai said, “The more we try to understand the macroeconomic, we feel very uncertain about it. The macroeconomic performance is correlated to ad spend, consumer spend and so on.”
He also acknowledged that the company has become “slower” after a boom of hiring.
But he didn’t specifically mention any plans for job cuts.
Pichai said, “Sometimes there are areas to make progress [where] you have three people making decisions, understanding that and bringing it down to two or one improves efficiency by 20%.”
Trade Deficit Tumbles
The U.S. trade deficit tumbled 12.6% in July to $70.6 billion.
That drop was slightly smaller than economists’ expectations for a decrease to $70.2 billion.
The improvement came as imports fell 2.9% to $329.9 billion while exports rose 0.2% to $259.3 billion.
The deficit is still up 29% year-over-year as the U.S. economy reopened quicker than our global trading partners.
Mortgage Demand Drops as Rates Spike
Mortgage demand fell further last week as rates spiked back to summer highs.
The Mortgage Bankers Association reported purchase applications fell 1% weekly and dropped 23% year over year.
Refinance applications were down 1% weekly and 83% annually.
The average contract rate for 30-year fixed rate mortgages with conforming balances jumped to 5.94% from 5.8% the previous week.
That jump in rates followed the surge in the 10-year Treasury yield as traders dump bonds in anticipation of more Fed rate hikes.
Oil Prices Slips As Market Weighs Demand Fears
Oil prices are lower again today as demand fears continue to weigh on the market.
West Texas Intermediate crude futures are down 0.8% to $86 bbl while Brent crude futures are down 0.8% to $92 bbl.
The American Petroleum Institute will report U.S. oil and gas inventory levels later today followed by the Energy Information Administration on Thursday.
In Case You Missed It
- The U.S. services sector picked up in August for the second month in a row. The Institute for Supply Management Services Index rose to 56.9% from 56.7% in July. That was an unexpected increase as economists were forecasting a decline to 54.9%. The data shows the services sector maintaining strength even as the Fed works to tackle inflation with rate hikes.