Morning Markets
September E-Mini S&P 500 futures (ESU23) this morning are up +0.27%, and Sep Nasdaq 100 E-Mini futures (NQU23) are up +0.12%.
Stock indexes this morning are moderately higher on mild short covering ahead of Fed Chair Powell’s speech later this morning at Jackson Hole, Wyoming. Slightly lower bond yields today are also supporting gains in equities.
The markets await this morning’s comments from Fed Chair Powell at the Fed’s annual symposium of global central bankers at Jackson Hole, Wyoming. The markets will parse Powell’s speech for clues on the outlook for interest rates and if he signals a pause or an end to the Fed’s rate hiking cycle. ECB President Lagarde will also speak at the event.
The markets are discounting the odds at 21% for a +25 bp rate hike at the September 20 FOMC meeting and 57% for that +25 bp rate hike at the November 1 FOMC meeting.
Global bond yields are mixed. The 10-year T-note yield is down -0.6 bp at 4.231%. The 10-year German bund yield is up +3.8 bp at 2.551%. The 10-year UK gilt yield is up +1.9 bp at 4.444%.
Overseas stock markets are mixed. The Euro Stoxx 50 is up +0.54%. China’s Shanghai Composite Index closed down -0.59%. Japan’s Nikkei Stock Index closed down -2.05%.
The Euro Stoxx 50 today is moderately higher. Strength in mining stocks is leading the overall market higher as iron ore prices climb. European technology stocks are under pressure today, following losses in U.S. technology stocks on Thursday. A larger-than-expected decline in German Aug IFO business confidence to a 10-month low is another negative factor for stocks. European markets are awaiting a speech from ECB President Lagarde later today from the meeting of global central bankers in Jackson Hole, Wyoming.
ECB Governing Council member Nagel said with inflation still around 5%, "it's much too early to think about a pause" in interest rate increases.
The German Aug IFO business climate fell -1.7 to a 10-month low of 85.7, weaker than expectations of 86.8.
China’s Shanghai Composite erased an early rally, fell to an 8-month low, and closed moderately lower. Chinese property stocks initially rallied today after the government eased home purchase rules, but the rally soon fizzled, and the overall market turned lower. The Xinhua news agency reported the government is proposing scrapping a rule that disqualifies people who ever had a mortgage from being classified as a first-time homebuyer, which would lower down payments for homebuyers and eases restrictions on borrowing limits. Stocks also retreated even after Reuters reported that Chinese regulators plan to cut the stamp duty on domestic stock trading by as much as 50%.
Japan’s Nikkei Stock Index today sold off and closed sharply lower. A plunge in Japanese technology stocks led the overall market lower, following Thursday’s plunge in U.S technology stocks. Japanese bank stocks also retreated after Goldman Sachs warned that a spillover of China’s property market stress to the rest of Asia will slow the region’s earnings and returns. In addition, seafood producers declined for a second day after the Chinese government imposed a ban on Japan’s marine products in response to Japan’s decision to release wastewater from the Fukushima nuclear site into the Pacific Ocean. China is the largest single export market for Japanese fish, crustaceans, and aquatic invertebrates.
Japan Jul PPI services prices rose +1.7% y/y, stronger than expectations of +1.3% y/y.
Japan Aug Tokyo CPI ex-fresh food and energy remained unchanged from Jul at a 41-year high of +4.0% y/y.
Pre-Market U.S. Stock Movers
Affirm Holdings (AFRM) jumped more than +7% in pre-market trading after reporting Q4 revenue of $445.8 million, well above the consensus of $406.5 million.
Hasbro (HAS) climbed more than +2% in pre-market trading after Stifel raised its price target on the stock to $94 from $79.
Ardelyx (ARDX) rose more than +2% in pre-market trading after Cantor Fitzgerald upgraded the stock to overweight from neutral with a price target of $10.
Marvell Technology (MRVL) dropped more than -3% in pre-market trading after forecasting Q3 adjusted gross margin of 60.3% to 61.3%, below the consensus of 61.7%.
Hawaiian Electric (HE) plunged more than -20% in pre-market trading after it said it drew down $370 million on revolving credit lines and suspended its dividend, and S&P Global Ratings cut its rating to B- from BB-.
Domo Inc (DOMO) sank more than -30% in pre-market trading after cutting its 2024 EPS forecast to a loss of -39 cents to -47 cents from a prior forecast of -27 cents to -29 cents, weaker than the consensus of -36 cents.
Intuit (INTU) slid more than -1% in pre-market trading after giving full-year revenue guidance of 7%-8% for its consumer group, weaker than its long-term goals of 8%-12%.
Nordstrom (JWN) dropped more than -3% in pre-market trading after the company said in a conference call that credit card delinquencies in the first half of the year were “gradually” rising and were now above pre-pandemic levels, which could result in higher credit losses in the second half of the year and into 2024.
Today’s U.S. Earnings Reports (8/25/2023)
Hibbett Inc (HIBB), Mitek Systems Inc (MITK), NioCorp Developments Ltd (NB), Ubiquiti Inc (UI), Waldencast plc (WALD).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
